Credit Cards Information
An Introduction Into Credit Cards
Looking over the history of the credit card, it used to be oh so simple. Each credit card company only had one card, one interest rate and one set of added bonuses for using the card. Now credit cards are created to suit the consumer, multiple interest rates, multiple incentive schemes, including giving to your favourite charity and credit cards to suit the consumers’ credit rating and income. There are many different types of credit cards, standard cards don’t normally exist in today’s environment, however, the following credit cards, followed by a brief description are the most common cards found in the market place today.
Balance Transfer Credit Cards
This card is normally used to transfer an amount owing from another card. The fee to transfer the outstanding debt from one card to another usually varies from company to company and depends on the amount outstanding, however if the consumer has time to do research, some companies will offer 0% on balance transfers for a set period of time. Saving money along the way, and potentially if continued over time, reduces the amount owed on a credit card.
Low Interest Credit Cards
These cards do exactly what is said on the tin, they are low interest cards on the money spent, however fees usually apply on these cards for balance transfer and may only have a low spending limit.
Credit Cards With Reward Programs
I think most of us have seen credit cards out there that offer air miles, or give you a certain percentage cash back or even supermarket points, good credit cards if you use a lot of air miles or spend a lot of money at the designated supermarket, however these are generally the only benefits for these cards, I would suggest a card like this if after every purchase you get to donate a percentage of the transaction to your favourite charity.
Bad Credit Or Credit Repair Credit Cards
These cards are specifically designed for people who have had credit problems in the past and need to try and build a better credit rating. These cards generally have high interest rates and low credit limits, however if used responsibly and paid on time, these cards will help you to rebuild a bad credit, but are come down to many factors not a quick fix scheme.
Choosing a credit card can come down to many factors and can come with consequences so after some research I have listed the most popular 10 worst credit card mistakes:
1. Getting too many
2. Misunderstanding the introductory rate
3. Not reading the fine print
4. Choosing a card for the wrong reasons
5. Not rate shopping
6. Making minimum payments only
7. Paying your bill late
8. Ignoring your monthly statement
9. Exceeding the credit limit
10. Buying things you don’t need
However, contrary to popular belief, credit cards are not as bad as they seem. If you become savvy with the ways in which you use a credit card, there are many benefits.
As we know, because of the recent economic downturn, it has been harder and harder to get finance. Politicians have also been having their say, saying that the more credit is issued to consumers, will relate in only more debt for the economy when people are failing to make payment.
It doesn’t have to be this way, if the consumer does research first and becomes aware of the common mistakes make and makes steps to be reserved, then a credit card can be a benefit to your personal finance situation.
Benefits include increased credit score and credit rating, insurance on payments made, protection from identity theft and a source of expendable cash in times of emergency, such as a car breakdown.
In the end all you need to do is remain sensible and a credit card can be a powerful weapon in your personal finance arsenal.