Credit Card Perks and Woes

Credit Cards are little plastic bars that help us purchase goods and services without paying money right away. Unlike cash transactions, it helps to keep a track of expenses. You get reward points on shopping that leads to discounts and offers. As long as you are paying your monthly interest, the advantages of owning a credit card are unlimited. However, at the same time, a missed payment or many missed payments can lead to serious trouble.

Consider credit card as your frenemy that helps you fulfill your dreams but would also not mind bringing you down. Let’s take a quick look at certain worth knowing perks and woes of credit cards:

Perks:

Short-term Loan: Credit card acts like a short term loan that you can pay interest for each month and live a comfortable life.

Offers, rewards, rebates and money back: This is where your negotiation skills can help you. Most credit cards give reward points on shopping from particular places which in turn lead to discounts and offers. However, there are other advantages like a 60 day or a 90 day return policy or a gas rebate. Do your homework before settling in for a card and get yourself the best deal available.

Insurance Coverage: Your credit card can provide car rental insurance as well as collision insurance and also trip cancellation coverage. So, if you are booking your travel tickets via credit card and you cancel your trip a few days before due date, your credit card cancels the cancellation charges.

Additional Cards and Warranty: You can get additional cards if you are an existing customer of the credit card company and you can also purchase an extended warranty on your card for free. All you need to do is check with your card issuer.

The perks of using a credit card are many and if you are paying your monthly interest religiously, there is no reason for not spending leisurely. Now, let’s have a look at how credit card can be your enemy.

Woes:

High APR: If your credit card interest rate is too high, it is most probably eating into the discounts or rewards you get through it. The best bet is to check the credit card APR and get rid of the cards that don’t work in your favor.

Missed Payments: If you miss to pay interest for a month or more, it’s going to add up and the late fees will weigh much heavier on your wallet. Be committed and pay your interest each month to save yourself a lot of trouble.

Illegal Credit Card Practices: False promises, non- existent add-ons and features that tempt you to buy a credit card from a store can lead to more debt. Check for the authenticity of the terms offered by your card issuer.

If you are careful while getting a credit card and also while using it, you should be able to use your card to the optimum benefits. You get travel points, you can use it in different countries and you can always download a credit card transaction history to make a personal report about your expenses.

Credit Cards help you save money and you can figure out the money pits in your budget.