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Posts Tagged ‘credit card’

Credit and debit cards have greatly increased consumer purchasing power. In the past banks were closed on weekends and you needed cash or a check with an indentification document to make a purchase. That was before the plastic was created. Now with credit and debit cards being accepted almost everywhere there is no need to carry cash or write a check.

Credit cards were first used in the 1950′s and were called diner cards. These cards (mostly owned by the wealthy) could only be used (with a letter of credit from the bank) at a selected group of restaurants. What began as a luxury only wealthy could afford has turned into a global phenomenon. Debit cards did not come into the picture until the 1970′s and only recently have become popular. Today, majority of the Americans own and carry a credit and/or debit card and has become a preferred way of spending. Now consumers are using credit and/or debit cards to buy anything under sun – ranging from furniture, electronics, and automobiles to something as small as a candy bar.

Another reason why consumers are choosing to use credit and/or debit cards is the extra protection (not needing to carry cash anymore) and being able to itemize everything easily at the end of the month. Also, what makes credit and/or debit cards an attractive way of spending is the fact that consumers can make purchases anytime anywhere without having to worry about banks closings.

Granted credit and debit cards are great and have opened a whole new world for us as far as our purchasing power, we should use these cards responsibly and avoid running into debt. Consumer debt is bad. It is okay to put everything on credit cards as long as you pay it off each month. Once you are in a debt slump, “Un-slumping” yourself is not easily done.

To save money on your credit cards, doesn’t always necessary mean that you have to switch providers to get a better deal, far from it as you can always start on your own doorstep and ask your current credit card lender if they can offer you a better deal than the one that you are getting at present.

This should be your first step if you are looking to get a better deal, but are unsure, as you are more than happy with the service that your current credit card gives you. Though you may feel that it maybe easier to simply change to a different lender, then this couldn’t be further from the truth and at the end of the day, the credit card that you have should be one that suits you and not the credit card issuer.

If you are in fact happy with your present credit card and the benefits and service that you have then read on and find out how simple that getting a better deal can be.

Firstly you have to ask yourself if you keep your payments up to date, have not missed any and have an overall good payment history with your credit card company, if so then you have the right cards to play when it comes to asking for a reduction in your APR charges. If you fail to have any of the criteria that has been mentioned, then before you can ask your credit card issuer for a better deal, you may find that you have to get your credit history up to scratch.

Once you have ascertained that you have the right credentials, look out for some of the better deals that you can currently find in the credit card market at the moment, so that you can tell them about the better offers that have been sent to you from the other credit card lenders, it is just another weapon to use to get what you want and with a good payment history and long service wit the card, most credit card companies do not wish to loose good customers, so even if it sounds a bit like blackmail you have to get the best deal for you.

Once you contact your credit card issuer, remember to always stay polite, even more so if the person on the other side of the phone is lets say having a bad day, simply ask to be put on to a supervisor or manager and while doing so remain calm and polite.

If you get to the stage that the credit card company has made you a better offer (I said “If” because always be prepared that your credit card issuer declines your request) see if it matches up against the other offers you have written down, tell them so and if they cant beat or even come close to matching it, then let them know that you will be cancelling your account with them and that you want it confirmed, if by doing this and they still don’t budge on the APR, then maybe who ever you move to, will value your custom more than they did.

Nowadays many credit card companies offer perks to lure new customers ranging from introductory offers with zero percent interest for transferred balances, Reward Programs offering airline mileage and cash back, and discount programs with select merchants. While these offers may be very enticing, there are five key factors, none of which include perks, that you should consider when choosing a credit card.

FEES

One of the first factors to consider when selecting a credit card is the number of fees associated with using the card and the totality of all of them if incurred. Companies can charge a variety of fees with the most common being annual, closure, over-the-limit and late fees. Because, not all companies charge the same fees and the level of the fees can also differ, it is important to read all of the fine print and details that accompany any credit card offer.

Annual Fee

An annual fee is a membership or participation fee that is charged for having a card. An annual fee can range from $25 to $50.

Closure Fee

Some companies also charge a closure fee when an account is closed. This fee also falls within the $25 to $50 range.

Over-the-Limit Fee

An over the limit fee is assessed when the sum of your purchases and fees exceed the amount of credit you have available for new charges. Generally speaking, this fee is around $25.

Late Fee

Late fees are charged when payments are past due. Some companies assess late fees as early as one day after the payment due date. Late payments can also trigger an increase in your annual percentage rate.

ANNUAL PERCENTAGE RATE

The annual percentage rate (APR) is by far one of the most important, if not the most important factor to consider when selecting a credit card. The APR, which is stated as a yearly rate, is the interest rate applied to outstanding balances. Low rates are preferable since this means you will be paying less to use a credit card. One single credit card can apply a different APR for balance transfers, cash advances and purchases.

CREDIT LIMIT

You should also consider the level of credit that is being offered when selecting a credit card. A credit limit is the amount of money that is available for purchases, cash advances, balance transfers, fees and finance charges. Credit limits can start as low as $200 for department store credit cards and go into the thousands for major credit cards (Visa and MasterCard) depending on your credit rating and income.

SECURED VERSES UNSECURED CARDS

Another factor to consider when selecting a credit card is whether the card is secured or unsecured. Users of secured credit cards pay a deposit to obtain credit. These offers often appeal to two classes of individuals, those who are very young and are having a difficult time establishing credit and those who have blemishes on their credit reports that prevent them from obtaining unsecured credit. The credit limit for secured credit cards is usually determined by the amount of your deposit.

Unsecured credit cards are by far the most widely held cards and tend to have higher credit limits.

GRACE PERIOD

The final factor to consider, the grace period, is the length of time you have to pay your credit card balance in full without accruing interest charges. The ideal card will have a grace period of 25 days or longer. If you carry a balance from month to month you will pay interest regardless of how many days are in a grace period with only new purchases being exempt for 25 days. The grace period is usually not applicable to cash advances and balance transfers.

PERKS AND REWARDS

While not one of the five key factors, I still felt it necessary to write a blurb on perks. Many credit card companies offer perks as an incentive to lure new customers and reward loyal ones. Perks can include a Rewards Program that awards you with airline mileage and cash back on your purchases. Some cards also offer discounts at select merchants and credit card registration, which protects you if your card is lost or stolen. Unless you are a frequent user of credit, perks should be the last item you consider when selecting a credit card because the biggest payoffs tend to go to the biggest spenders.