Credit Cards A Favorite Way To Pay |
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Cases of people drowning in credit card debt
by using all their credit cards and affording nothing more than the minimum monthly payments are all too common. High interest payments can trap consumers in debt for years apart from the huge income loss owing to the finance charges on their families. Unfortunately too many Americans have to live with this fact especially since certain amount of financial discipline can help avoid this situation. Developing and sticking to a spending plan can make credit cards a lot less dangerous than other forms of payments. Sensible use of credit cards can be a big help. They help in emergencies, make purchases safer and more convenient and build good credit. However many people using credit cards fall into credit card debt which is a big problem. Irresponsible use of credit cards can cause crippling debt, identity theft and very poor credit scores. It's advisable to understand the right way to use credit cards before signing up for any of the credit cards. Paying the entire credit cards bills every month will prevent fees and finance charges from building up. With a certain amount of prudence and a spending plan, you can change credit cards from a problem to a highly beneficial source offering a host of advantages compared to alternative forms of payment. Reward Programs Most credit card companies reward frequent credit cards usage with loyalty programs, which may either, is in points or cash. According to each company, points are redeemed for benefits like restaurant gift certificates, hotel stays, airfare, vacation packages and lots more. Typical cash credit cards offer a 1% rebate on purchases which can add up to $180 a year for a monthly expenditure of $1,500. It's easy to achieve this spending level by making all your purchases on credit cards, even utility payments. Some credit cards even pay over 1% for specific purchases including groceries and gas like Citi's Dividend Platinum Select card. Perpetual 0% Loan Using credit cards is equivalent to using the bank's money for paying the store instead of your own money and for free. In the time you wait for the statement, your money can be generating interest in an account. Distinct from debit cards, which continuously drain your account balance, credit cards can leave your entire balance in the bank account untouched for earning interest until your statement is due. That works out to an extra $35.25 a year on a balance of $1,500 at the going rate of 2.35%. Fraud And Loss Protection Fraudulent use of your credit card number makes a maximum liability of $50 as per the law. This doesn't apply to debit cards. Your debit card can easily be used as credit transaction in retail stores or online, for which no PIN number is required. The danger in this possibility is that a thief can wipe out your entire bank account balance. When cash is lost, it's for goo0d, but credit cards can be replaced in a matter of days of reporting the loss to the concerned bank. Until then you are safe from unauthorized use by anyone else who may have the card. Warranty Coverage MasterCard credit cards often warrant purchases over what is offered by the product's manufacturer. By making the purchase on these credit cards, an extra protection level is offered for free. Purchase Protection MasterCard credit cards mostly offer purchase assurance plan as well. It automatically insures your purchases against damage or theft for the first 90 days at no extra cost. Ensuring the safety of your credit cards is crucial to combat fraud. Your credit card company will readily provide you all the information needed on credit card safety if direct contact is made. With so many advantages, credit cards are easily superior to other payment methods as a favorite way to pay. Your monthly credit card bill need not be dreaded and instead become a pleasing reminder of financial savviness. |
