What You Should Know About Using Your Credit Cards
Today, almost everyone is in possession of one or more credit cards. But does everyone understand how the credit cards should be used? ; doesnt seem so. Some credit card holders only know how to spend on their credit cards till the credit limit is reached. Others know only about using credit cards for shopping and bill payments. Still others are too afraid to use their credit card. A lot many are unaware about the ways to protect their credit cards.
So what is it that you should know about using credit cards?
The first thing is the fact that whenever you use your credit card to make a payment, you are borrowing that amount from someone (credit card supplier in this case). Thus you will need to return this borrowed money to the credit card supplier within a specified period of time failing which you will incur a late fees and interest on the borrowed amount. So, you should be careful about your credit card payments. Besides the late fee and interest, they also affect your credit rating and we know how important the credit rating is. A bad credit rating can lead to rejection of mortgage applications, loans, subsequent credit cards and even a job application. You should also make it a point never to exceed 70-75% of the credit limit on your credit card. Not only does this shield you from getting into a credit card debt trap but also protects your credit rating.
Credit cards need protection against fraud and every credit card user should be aware of the ways to protect their credit card(s). There are generally a set of very simple precautions that the credit card holder need to follow. All the credit card companies supply instructions to this effect at the time of credit card delivery. These include things like signing at the back of credit card, reporting theft, PINPassword protection etc.
Besides the security related instructions, its also important to read through the instructions related to the benefits on your credit card in order to realize the full potential of your credit card. These include discounts on shopping, travel, car rentals etc. Then there are cash back options as well which have become very popular lately. There are some really good benefits for travelers too. These include things like free travel insurance and baggage protection. Besides the regular benefits, the credit card suppliers generally include some joining benefits too for the new customers. The joining benefits are generally in the form of discount vouchers.
Another important thing to note is the various kinds of fees and commissions charged by your credit card supplier. Besides the annual fees and APR there are other services too which attract a fee or commission e.g. there is a fee associated with cash withdrawals; similarly there is a commission associated with foreign exchange transactions. All these charges are clearly mentioned in the instructions booklet that you receive with your credit card and any changes to these are separately communicated by the credit card company.
Credit card suppliers keep coming up with a lot of different offers throughout the year. Be on the lookout for these offers. Some of them might be of interest to you. Generally, you will receive intimation about these offers at your billing address or your email address too.
Almost all credit card companies have a membership rewards program too wherein you earn points for any payments made using your credit card. Once you have accumulated enough points, you can exchange them for free gifts. Very often the catalogue of these gifts is also supplied at the time of you joining the membership reward programs. Its important to note that there might sometimes be an annual fee associated with the membership rewards program.
So just learn more about your credit card and make full use of its capability.
What You Should Know About Credit Card Terms
Credit card companies keeps pushing hard to get more customers daily by giving pre-approved card offers to would be clients through mail. Chances are youve gotten one of this offers in your mail in recent days. Such promotion has being in existences long before now. Though getting such card is good to some extent and getting one will be helpful however, you dont have to rush getting one without considering the plan terms associated very well.
There are lots of plan terms that you really need to study very well while shopping for credit card if you are not ready to put yourself in financial prison. These terms affect your overall cost. In this article we will take a look at some of this credit card plan terms you need to consider before choosing a company to deal with. Get a cup of coffee while we discuss each of terms you need to consider.
Consider a company that gives free period or grace period over others. Because without free period, the card issuer may impose finance charge from the date you use your card or from the date each transaction is posted to your account. Free period allow you to pay back your balance in full before due date in other to avoid finance charges and its usually mail at least 14 days before the due date, giving you enough time to pay.
Another very important term to take note of is APR (Annual Percentage Rate) which is the measure of the cost of credit, expressed as a yearly rate. APR often changes when there is a change in interest rates or other economic indicators. Still companies must disclose this before you open the account and on your account statements.
Apart from the annual percentage rate, you need to consider how much the issuers charges for membership fee. The annual membership or participation fees varies, its often between 25 and 100.
You also need to know about method issuers will use in calculating your finance charge if you dont have a free period, or if you are expected to pay for purchases over time. Knowing this will help you keep your finance charge low by measuring your buying patterns and paying back on time.
Some card issuing companies charges transaction fees and other minor charges when you make late payment, get advance cash with the card or exceed your credit limit. As a matter of fact some even charge monthly fee whether or not you use the card.
What you should know about Airline miles credit cards
Some of the things that you should know about airline miles credit cards may be a little surprising and they may not be to you. One thing that you should know about the airline miles credit cards is that you are going to more than likely need to pay an annual fee to receive the airline miles credit cards. There may be some credit card companies that will not charge you the annual fee if you are using your credit card to purchase your airline tickets.
One of the disadvantages of the airline miles credit cards is that if you do not use your credit cards often it could take you a couple of years to acquire enough points to be able to take a trip with your airline rewards. When it comes down to it you can actually purchase an airline ticket more than once before you actually have enough airline miles so that you are able to take a trip with your miles. There are a few other things that you are going to want to make sure that you are checking out as well with the airline miles credit cards. You should know if there are any seating restrictions, expiration dates, or any black outs that will be assessed to any airline rewards credit card you may choose.
One of the big advantages of the airline miles credit cards is that if you are in need of an airline ticket at the last minute and you have enough points to purchase one you are not going to have to fork out the high cost of a last minute ticket. We all know that the airlines will raise their rates when you are purchasing a ticket at the last minute and when you are going to fly in the high season of the year. One other advantage of the airline miles credit cards is that some of the different credit card companies will give a new card holder bonus miles for becoming a new credit card member.
You are going to want to take your time and check out all the different offers that the credit card companies are going to give you with the airline rewards that they are offering. That way there you are going to defiantly receive the best airline miles credit card that is going to work for what you are in need of.
Get A Credit Card With A Low Interest Rate
Before you choose a credit card it would be wise to first find out the interest rates offered by all the credit card companies and banks. While you compare credit card companies and banks, take note of the ones with low interest rates and offer the best benefits. Dont miss the fine print as that is where the most important information is usually given. Fine prints almost always specify the conditions applied on using their service.
It is generally a wise decision to go with a credit card that has a low interest rate. A low interest rate would almost always mean that using the credit wouldnt eat up your savings.
One of the strategies of many banks and credit card companies to attract members is to offer an introductory low interest rate then hike up the rate after a certain period. It is therefore advisable to inquire how long the initial low interest rate would last.
To switch to them, some credit card companies and banks would waive fees if you transfer balances to them from your old card. The fees asked by banks for transfers are actually interest rates in disguise. Make sure that a low fee, which is equivalent to a low interest rate, is charged to you when transferring or you could end paying much more than you actually have to for clearing your debt.
One thing you could do is pay for balance transfers through pre printed checks. Your best option is to transfer balances to over the phone by calling up the customer service line of the bank or company. Doing such would cost a lot less or nothing at all and because you chose a card with a low interest rate you know your expenses would be lower the next time.
It is al important for you to know that incentives such as short term low interest rate will eventually rise even without due warning from your bank or credit card company.
You could always ask the bank or company to give you a low interest rate provided that you have a decent credit history with the company or bank. If they refuse to give you a low interest rate then you can always switch to a service that offers you a better deal.
Remember to use your credit card wisely. Keep a tab on your expenses while using this card, ensure your dues are cleared regularly and ensure that the low interest rate remain low.
Get A Cheap Credit Card By Understanding The Fees
Credit card companies charge fees of some sort or another. The key is to find a card with the lowest fees for the services you use. For instance, if you use cash advances, then investigate those fees with credit card companies before you sign up with them.
Upfront Fees
Not every credit card program has upfront fees, so it pays to shop around for the right card. For instance, annual fees are common on cards with fixed or low rates. In the right circumstance, this fee with the right rate can save you money.
You will also find cash advance fees, either a flat rate or percentage. Not all cards charge this, but usually they have higher APRs. It is important to read the terms if you plan on using this feature.
Balance-transfer fees also can be charged, usually when you use a check sent by the credit card company. Some programs offer no fees or low rates for transfers, especially with an introductory offer.
Extra Fees
Extra fees can often be avoid but should still be researched. Late payment, over-the-credit-limit, or credit increase can all result in extra pounds. Less common are set-up, return item, or telephone ordering fees. Unless a card is offering an exceptional rate, these types of programs should be avoided.
Low Fees Equal High Rates – Sometimes
While no one wants to pay fees, sometimes they can save you money. With large balances or balance transfers, you can often find lower rates by paying a small fee. You may also find that with incentive programs, a monthly fee will still allow you to come out ahead.
However, for those that pay off their balances every month, choose a card with no or low fees. You can also choose to have a couple of different types of credit card programs to meet your different financing needs.
Research Fees
Under federal law, credit card companies are required to list fees and APRs before you apply. Often the information will be present in a table. It will include annual, minimum finance, cash advance transaction, transfer, late payment, and over-the-credit-limit fees. With this information, you can decide what card is best for you.
Five Simple Ways To Regain Credit Card Control
Credit cards easily get out of control. You simply don’t realize how much you are charging and how little you are paying. Before you can even think about paying your card off entirely, you have to simply regain control of your credit card debt.
Here are five simple steps that will help you regain control, and eventually pay off your debt. Follow them step-by-step and you will find that they aren’t overwhelming or too difficult. In fact, they don’t take much time at all.
1. Pay more.
You shouldn’t carry a balance on your credit card from month to month, but you probably are anyway. If you are only paying the minimum payment, you are slowly killing yourself. This will stretch your payments out for decades. Yes, decades. You need to start putting extra money to each credit card payment. Even if it is only 15, you are saving time and money.
2. Make a phone call.
Take the time to call your credit card companies and request a lower interest rate. It isn’t hard to do. You simply request a better interest rate. If you are a good customer who makes his or her payments on time, you will probably be successful. Tell them that you want the lowest rate possible. You can even say that you have received an offer to transfer your balance to another card at a better interest rate. You want to give them a chance to compete. If they won’t lower your rate, consider switching to a card with a lower rate.
3. Say goodbye.
Send your cards on a little vacation. If you have debt and you can’t pay it completely off, you need to stop using your credit card for now. Put it somewhere that you won’t be able to easily access. This removes the temptation to simply charge this one thing. I suggest a safe deposit box at the bank. This usually always works. If you have a true emergency, you can get it. But it often isn’t worth the hassle to get it to just buy a new sweater.
4. Look for money.
Now is the time to start paying that debt off with what you already have. If you have an 18% credit card and money in the bank earning 5%, you are losing 13% each month. Take your savings and pay off your credit card. This will save you interest and a lot of worry. Then work on building back up your savings by having the amount you paid in credit card debt automatically deposited into your savings each month.
5. Vow to change.
Now that you have seen the stress and problems that credit cards bring, you can make a committment to change. Credit cards aren’t the problem, they just contribute. The problem is the way you spend. You need to realize that you cannot continue to shop the way you do. You have to change your spending habits so that you aren’t tempted to use your card. It is hard. People slip back into it easily. But you need to find a way to remind yourself that it isn’t worth it. Regain control of your credit and turn it around.
