Credit Cards Aren’t Bad, They’re Misunderstood

Credit Cards Aren't Bad, They're Misunderstood

If you read a lot of articles about personal finances, you’ve likely seen many that recommend against credit cards. They act like credit cards are the enemy and cause people to go into debt. Credit cards are neutral at the beginning and whether they become good or bad depends on who is using them and how they use them.

If used correctly, a Credit Card can be a great way to have purchasing power, build good credit, and even offer rewards, as long as they are used responsibly.

A credit card is also an important part of daily life, as it is necessary for many services. Have you tried to rent a hotel or car lately? They all want you to put a credit card on file before they let you sign up.

So, instead of thinking credit cards are a bad thing, you need to learn to use credit cards properly, w88 pay your credit card bills on time, avoid credit card debt and don’t make the mistakes that can lead to bad credit.

Use credit cards responsibly – Just because you have been approved for a credit card doesn’t mean you should rush out on a shopping spree and spend as much as you can. That’s a path to overwhelming credit card debt.  You should use a credit card as if you were shopping with cash. Make intelligent purchasing decisions and have a realistic plan in mind of how you are going to pay it off at the end of the month.

Make payments on time – When those credit card bills come in, they need to be paid. Making your credit card payments on time is one of the most important things you can do to protect your good credit. If you miss a payment not only will you be hit with a finance charge, but you will also likely have your interest rate increased, and the credit card company will report to the credit bureau that you did not pay on time. That can negatively affect your credit rating.

Take advantage of rewards – If you are going to use credit cards instead of cash, you should try to get something back for your usage. Many credit card companies offer rewards programs. From airline miles and cash back to gas rebates there are a number of perks that are being offered on credit cards these days. Before you jump on the rewards card bandwagon, make sure you know how much the card will cost (many have annual fees) and that you will be getting more in rewards from the card than you are paying in fees.

Why Credit Cards Are Better Than Loans

Why Credit Cards Are Better Than Loans

If you are like many people who are still looking to clear our a lot of that debt that you racked up at Christmas time, you may be considering getting a loan to consolidate your debt and try to get things back under control. While a debt consolidation loan may well do the trick, you should realize this is not the only way to get out of debt.

Credit Cards can also be used as a path to getting out of debt. Many people think credit cards are the reason they ended up in debt in the first place, so how will they help?

The reason you got into debt in the first place was that you got drawn in by all those department store credit cards that offered to give you 10 or 15% off of your Christmas shopping total. You thought that was a great deal at the time, and may have even decided to buy a little more than you were planning on, thinking you would get a great savings.

What you didn’t take into account was all the money the credit card company was going to get in interest. That started becoming evident as the credit card bills rolled in and you realized you were starting to get buried under credit card debt.

Now, you find yourself in a position where you don’t want to turn your good credit into bad credit, and also don’t want to spend the rest of the year paying off last years Christmas presents. So, you are considering a loan.

While the stack of credit card bills may have you thinking credit cards are no good, the reality is that credit cards can be great for getting out of debt, if you choose the right ones.

You need a 0% or low interest credit card to consolidate your current credit card debt into one monthly bill. In many cases, no or low interest credit cards are a better deal than a loan.

When you get a debt consolidation loan, you will begin to pay interest on the purchases immediately. When you consolidate all of your credit card bills onto a 0 interest credit card, you will have that introductory period (Often 6 months or more) to pay off the debt amount, without being charged any interest.

That translates being able to get out of debt sooner, and being able to save up a little more money towards this years Christmas shopping list.

Common Credit Card Errors to Avoid

Common Credit Card Errors to Avoid

Do you appreciate just how powerful those pieces of plastic in your pocket are? Very few people think about all of the powers and repercussions that are related to credit cards.

We are so accustomed to having Credit Cards, no one really thinks about how important these cards are.  Here’s what to keep in mind.  Using credit cards responsibly can help you build good credit and have great buying power. Incorrect credit card usage can lead to credit card debt, overwhelming credit card bills, and a bad credit record that can take years to restore.

The best way to keep your credit cards on the good side of your financial life is to not make the common mistakes that may turn them to the dark side.

Don’t Have Too Many – How many credit cards do you have? Many people sign up for every card offered by each gas station, department store, and other lender that comes along. They think it’s impressive to have more cards. But in reality, a lot of credit card accounts can have a negative effect on your credit report.  Credit cards, in your credit report, are all counted as liabilities. The more you have, the more of a risk you become, and therefore the lower your credit score. In order to stop too many credit cards from giving you bad credit, you need to close some of those accounts.

Control Spending Habits – It’s easy to get used to being able to say ‘charge it’. Many people figure a few charges here and there are not a big deal, but if you do the math you’ll see things differently. A $7 breakfast on Monday, $6 specialty coffee on Tuesday, $5 snack on Wednesday and $14 for a movie ticket, popcorn and a drink on Friday comes up to $32 a week. Do that every week of the month and you’ve added $128 to your credit card debt each month.

Know what you’re paying – Once you start to pay more attention to what you are charging on your card, it’s time to pay more attention to what you are paying on your card, in charges from your credit card company. From interest to other finance charges, you should find out what you are being asked to pay by the credit card company. Learn your grace period and try to pay off your balance in this time frame, so you are not hit with interest charges.

Online Credit Card Applications – Security and Technology

Online Credit Card Applications – Security and Technology

You may be wondering if it is safe to apply online for a credit card. The answer to that question is yes. New technology that is being used is known as SSL encryption and protects you the consumer when filling out online credit card applications.

This credit card technology is also known as (SSL) Secure Socket Layer technology and is now used by all of the banks for all transactions and personal information that is to be kept secured. Many banks and credit card companies want to keep you as a customer so they ensure that when you are applying online that you have a secure experience to keep you as a customer and to get your future business.

All major Banks are working hard to keep your information as secure as they possibly can in regard to filling out online credit card applications. Many of the larger banks require two forms of identification or two separate pin numbers for accounts. When you call a bank operator any more via the phone, they will normally ask you a series of questions to ensure your identity and to verify it is really you that they are speaking to. Banks also take online security very seriously and take great measures via encryption and other methods to keep your information safe online.

The credit cards these days also have fraud protection, which makes you feel a little more comfortable just in case something would happen. This is really great protection especially when traveling or in an unusual environment.

Online Credit Card Applications save you time and money and make you a more educated consumer when it comes to these matters. Many credit cards are very powerful in regard to purchasing power and benefits as well as the low interest rate credit cards. There is little risk to applying online with one of the banks credit card applications to get the best rate and benefits you deserve.

Top Credit Card Do’s and Don’ts

Top Credit Card Do's and Don'ts

Whether you are taking the step to get your first credit card, or are thinking of getting another line of credit, there are a lot of do’s and don’ts that go with this territory.

Looking for a Credit Card

Do compare your options – There are a number of credit card offers on the market these days. They are different and come with various pros and cons. Don’t jump at one card before you compare and contrast the best looking deals.

Do check interest rates – Unless you are going to pay off your Credit Card balance every month, the interest rate is a very important variable to keep in mind. The higher the rate, the more money will be added to your balance each month you are unable to pay the card off.

Do learn about penalties – If you are late with a payment, even once, there could be hefty consequences. Find out what the late fees are and what a late payment will do to your interest rate. Many companies hike the rate by 10-15% for one late payment.

Don’t forget about annual fees – Many cards, especially rewards and cash-back cards, have an annual fee. If you are considering this type of card, make sure you will be able to get enough back from the reward aspect of the card to warrant the fee they are imposing.

Shopping

Do spend wisely – When you first get a credit card in your hand it’s easy to have things get out of hand, with all that spending power. Remember, all those little charges add up. Whether it’s a muffin and a cup of coffee on day and a movie ticket the next, at the end of the month all those little charges can add up to be one very large bill.

Do keep copies of your receipts – This way you can compare the charges on your card at the end of the month to what is on your statement and look for any unauthorized charges.

Don’t forget to print out receipts for your online purchases – It is important to track all your spending, even internet spending so you remember these when you are going over your monthly statement.

Security

Do copy your information – Make a copy of all your credit card account numbers and expiration dates. Also, write down the phone number to your credit card company. If your card is ever lost, you will know whom to contact to stop any unauthorized charges from going through.

Don’t give out your credit card information too easily – Online, make sure you are using a secure site before you enter your information. Also, double-check to make sure you are dealing with the right company. Many copycat sites will pretend they are another company to get your credit card information

Don’t fall for e-mail scams – There are a number of e-mail scams that will tell you your account has been compromised. They ask you to click on a link from the e-mail and enter your account information to sort it all out. If you do, you will have just given the con artists access to your credit cards.

Credit Card Key Terms and What They Mean to You

Credit Card Key Terms and What They Mean to You

How well do you read those credit card offers that you are always getting in the mail? If you are like most people, you look at the larger print items. You may know there is no interest, for the first six months, that there is a balance transfer special, that you can get cash back, but what about the real legal description of the card?

When you are shopping around for the best credit card, the more you know about cards, the better decision you will be able to make.

Here’s a rundown of many of the terms you will see on those credit card offers and what they meant to you:

Introductory Rate – You will get this interest rate when you initially sign up for the card. With many companies, this is 0%. They want to get you in the door with a great rate. You need to make sure you know how long this great rate will last and what the permanent rate will be after that time. A high rate down the road may negate a low rate in the short term.

Annual Fee – While you would think credit cards would be free to have and use, that is not the case. Many credit cards have annual fees associated with them. These fees, often on rewards and cash-back cards, are essentially fees for being a member of their program. Find out what these fees are and if you will be getting enough in rewards to make sense in paying them.

Pre-approved – It sounds great to hear you are pre-approved for something. Unfortunately in credit cards, this does not always mean what you think it should. When you see pre-approved on a credit card offer, that’s not a guarantee. It simply means you seem to be within the general guidelines of the people they are looking to convince to get their card. However, you won’t know if you are really approved until you sign up and they look at your credit report.

Grace Period – Essentially the grace period on your credit card is the same-as-cash time-period. If you make a charge and pay it off within this time, there will be no interest charged on the purchase. Grace periods differ by company. Some offer no grace period; others will give you a full month to pay before they start adding finance charges.

Transfer and Transaction Fees – Many credit cards offer great deals if you want to move a balance from another credit card to the new one. Often they will put this new debt on the card at 0% interest for some time. While you may think this is great way to stop accruing interest, make sure you are not paying a ‘transfer fee’. These can often be higher than the interest would have been if you were paying off the initial debt at a good pace. Also many cards offer cash advances, to make purchases. While the idea of being able to write a check off of your credit card is nice, there are often fees attached to this kind of transaction. Read the fine print of the card you are considering.