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Credit Cards: How to Capitalize Owning One?
By Steven J. Talrechi | July 14, 2008
Credit cards today are a different animal than they were 20 years ago. It used to be that a credit card was only used to buy things now and pay later. The fierce competition between the credit card issuers has made it possible for cardholders to take advantage of owning a credit card.
Credit cards compete for your business by offering incentives such as low introductory interest rates or rewards to new customers like free flights and cash back. These rewards are generally based on how heavily you use your card. There’s a trick to these incentives and we’ll show you how to take advantage of these incentive programs.
Rewards cards: You should definitely look around for the best offer when it comes to cards that give you rewards. You want to look for rewards which will genuinely be useful to you. If you don’t fly often, or don’t charge a lot on your card, then it’s unlikely that a card which offers free flights as a reward is right for you. These sorts of rewards programs often require you to spend a lot before you get a flight.
Shop around a little and find a reward that works for you. Cash back rewards are very popular. Be sure to read the fine print before you apply for the card. Ask the rep if there is a limitation on the amount of rewards you can claim. Some card companies will only allow you to claim a specific amount and once you get there, the rewards disappear.
Also ask them if there is a time limit on redeeming the reward(s) as some are only valid for a set period of time and then they expire unused.
In the case of a gasoline reward card, make certain that there is an affiliated gas station in your city/town.
Low introductory rates: This is an interesting one. Say you have a credit card that carries a rate of 19% per annum (yearly). You have a small balance on it that can be easily paid off in say 180 days. In your shopping, you find a card that offers a 9.9% rate for new card clients for the first 12 months with no annual fees. In this situation, you could essentially take that card, transfer the balance to it and pay it off with less interest in less time. This could literally save you hundreds of dollars very quickly. The old card could be canceled or, if you have held it for some time, saved for emergencies.
In either event, you could take full advantage of being a credit card owner by using the credit card company’s greed against them. Competition always breeds good things for consumers. Look around and see what is available. You may be pleasantly surprised to see advantages you never thought possible.
Do your research before you sign up for any cards - you stand to get some great rewards and perks this way; just don’t rush into anything, there might be a better deal right around the corner.
Topics: Finance |