July 23, 2008
The Benefits of Having a Credit Card
By Steven Clayton
Credit cards today are a different animal than they were 20 years ago. It used to be that a credit card was only used to buy things now and pay later. The fierce competition between the credit card issuers has made it possible for cardholders to take advantage of owning a credit card.
Credit cards compete for your business by offering incentives such as low introductory interest rates or rewards to new customers like free flights and cash back. These rewards are generally based on how heavily you use your card. There’s a trick to these incentives and we’ll show you how to take advantage of these incentive programs.
Rewards cards: You should definitely look around for the best offer when it comes to cards that give you rewards. You want to look for rewards which will genuinely be useful to you. If you don’t fly often, or don’t charge a lot on your card, then it’s unlikely that a card which offers free flights as a reward is right for you. These sorts of rewards programs often require you to spend a lot before you get a flight.
Try to find rewards which fit your needs. Cash back rewards are good for anyone. Always read the fine print though and be sure to ask the rep fro the credit card issuer if there are any conditions or limits attached to the rewards.
You should also ask the rep about time limits. A lot of these programs either have a limit to the amount of rewards you can claim or a time limit in which you can claim the rewards, with an expiration date.
If a gas station reward card looks tempting to you, make sure that there is a participating gas station near you before you sign up.
Low introductory rates: This is an interesting one. Say you have a credit card that carries a rate of 19% per annum (yearly). You have a small balance on it that can be easily paid off in say 180 days. In your shopping, you find a card that offers a 9.9% rate for new card clients for the first 12 months with no annual fees. In this situation, you could essentially take that card, transfer the balance to it and pay it off with less interest in less time. This could literally save you hundreds of dollars very quickly. The old card could be canceled or, if you have held it for some time, saved for emergencies.
Keep this in mind - when the credit card companies compete, you come out on top. Don’t be afraid to shop around for the best offer - the credit card companies want your business. You might be surprised by the deals you find!
Just be sure to ask the questions and do the homework FIRST. Haste makes waste, as they say.
Topics: Credit |
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