Advantages and disadvantages of credit cards

“Christmas Time, Mistletoe and Wine” How many times have you heard this so far and its only November? A few I’ll bet, but with Christmas seemingly becoming earlier to us each year, we will no doubt feel the need to get ahead with our present and food buying. This though only leads to us spending more than we should. This is because with the shops full of decorations and Christmas tunes, the stores are dictating to us that we have to buy our gifts now, which will mean by the time December has come and gone. We would have spent more over the 2-month period that the shops have been full of Christmas cheer.

 This is not all bah! Humbug.

 Personally for the occasion alone and seeing the kids faces when they open their presents on Christmas morning, as Christmas is a special time of year that for the day makes all the preparation and spending all worth while.

 But that doesn’t mean that it comes without cost and in some cases more of a cost than folk can ill afford. For all of its pomp and occasion, Christmas can come at a heavy price to bear for a lot of people who, rather than let their children and family down, will turn to the promise of riches that credit cards and store cards offer.

 Don’t get me wrong, credit cards and even store cards, have their uses. This is only true though, if you only use them to your advantage, to get the best out of them. If you are thinking of taking one or the other, then the only suggestion that I can make is to plump for the credit card, over the store card.

 We all want to enjoy this time of year, so by getting all that you want to do this and in doing so, save cash and not to fall heavily into debt, will make the festivities all the more enjoyable. So by giving you a few advantages and disadvantages, which credit cards and store cards entail, will hopefully go a long way on helping you make the right decisions.

 Firstly the advantages of credit cards:

•   More favourable interest rates than a store card.
•   Many offers on the market, which are giving you an interest free period.
•   Some come with money back schemes that give you a percentage of your expenditure back to you. (Usually between 0.5%- 2%)
•   Will protect your gifts, as soon as you have bought them.
•   Lets you buy now and pay at a later date, only on what you have spent without incurring any interest charges.

 Now the disadvantages:

•   Can lead you to spend more than you can afford to pay back, which in turn will lead to the interest being charged to your account.
•   They can come with a heavy hit in the pocket, with charges for late payments and going over your credit limit.

 Advantages of the store card:

•   Can use them as soon as you are accepted for the card.
•   Initial discount (normally 10% off you first purchase) will give you a saving straight away.

 Disadvantages:

•   Overly high interest rates, which are well above those of a credit card. Some can be as much as 30%.
•   Can lead you quickly to debt, if they are not cleared at the end of each month.
•   Sold to the customer, by assistants who know absolutely nothing about what they are selling.

5 sure fire ways you can avoid costly credit card late fees

Credit card late fees are a fact of life for some consumers, but they don’t have to be for you. Legally, credit card companies can hit you with pretty much whatever fees they want. On the other hand, you don’t have to pay them, but only if you avoid them in the first place. Here are five sure fire ways you can avoid costly credit card late fees:

 1. Pay Before the Due Date

Of course, this makes the most sense. However, this is also the single most important reason why people get socked with fees: they receive their bill and immediately forget about it! When you get your bill, open it up and pay it promptly. Waiting means forgetting and forgetting about your credit card bill will cost you money.

 2. Pay on the Internet

If you have access to a computer, then paying online is the best way to make certain that your payment gets to your credit card provider on time. Be careful, as there is still some lag time from when you authorize funds to be released from your checking account and when that payment is finally credited to your credit card account. The gap between the two can be as long as one week!

 3. Schedule Automatic Payments

Some credit card providers allow for you to set up a scheduled deduction from your checking account which is then automatically sent to your credit card provider. You should set it up to take money out of your account well before the due date to ensure that your funds are received on time. You can always send in a separate, extra payment if you want to pay down your debt faster too.

 4. Question a Late Payment

Even if the credit card company claims that your payment was late, it doesn't mean that you must be charged a late fee. Contact the company and ask them to reverse their charge –- which usually runs between $29 and $39 -- and to expunge their records of your tardiness. You not only want to avoid any fees, you want to avoid their possible notification of your lateness to the three major credit report agencies [Experian, TransUnion, and Equifax]. Any information supplied to the credit reporting agencies can work against you in the form of higher interest rates on current cards as well as on future loans!

 5. Go with the Citi Simplicity Credit Card

Now, consumers have a new option to help them avoid late fees: Citi’s new Citi Simplicity card doesn’t charge late fees. Please click the link below for more information about this breakthrough card.

 Taking the appropriate action can help you to avoid late fees and allow for you to keep more of your money in your pocket. Become better informed and start saving money today!

7 things you need to consider when you take out a credit card

How many times have you taken out a credit card based purely on its current interest rate or balance transfer option?

 You may be surprised to note there are at least 7 elements worthy of consideration when you take out a new credit card. To judge a new credit card on just one or two options could easily result in a bad deal for you. You need to consider the following 7 options when you take out a credit card:

 1. The Initial Concessionary Interest Rate And Period

 Many credit cards offer a 0% interest rate on purchases for a limited period, usually six to nine months. This option can be very attractive particularly when you do not repay the balance in full each month.

 After the initial period the rate reverts to the standard rate, usually in the 10 to 16% range although this can be considerably higher.

 Some cards however have no interest free offer but have a much lower permanent rate, from about 6.9% (although it will vary in line with general interest rate charges).

 If you are likely to have a long term balance (if you are unable to pay off the debt within the first 6 to 9 months) this option could save you money in the medium to long term. You will not be able to switch to this rate if you have taken the 0% initial rate offer.

 2. A Monthly Interest Free Period On New Purchases

 This relates to the period between your purchase of an item and when you will be charged interest on that purchase amount. Many cards have a policy of only charging from the payment date after the item appears on your card statement.

 The effect of this is to give you between approximately 25 days and 56 days interest free credit on all purchases. Clearing your balance within this period will result in no interest being charged.

 Some cards will charge interest immediately from the date of purchase and are therefore not suitable if you clear your balance each month.

 3. The Annual Fee

 Many cards have now implemented an annual fee. This fee is chargeable whether you clear the debt each month or if you roll over your debt.

 4. 0% Balance Transfers

 When taking out a new credit card you will normally have the option of transferring any outstanding balance to your new card with no interest charged for a specified period.

 Although marketed as a "0% balance transfer" many are not totally free of charge. An increasing number now charge a one off charge of 2-3% of the amount transferred as an "administration chearge" for handling the transfer.

 This is legally not an interest charge but it amounts to the same thing - you are charged a fee by your credit card company based on the amount transferred.

 The availability of true 0% balance transfers is disappearing and in all likely hood will completely disappear sometime soon. If a 0% balance transfer is important to you take advantage soon, however be aware that many of these cards have higher subsequent interest rates.

 5. The Availability Of Cashback

 Many cards now offer cashback on purchases. This is usually is between 1/2 and 1% of new purchases (excluding balance transfers and cash withdrawal). If you do not repay your account in full each month take this into account when considering the interest rate chargeable.

 It is only where you repay the card in full each month that this is a true cashback on purchases and if you do repay in full each month you may choose to make this a priority.

 6. The Rewards And Discounts Offered With Your Credit Card

 Rewards are where you can purchase goods or services at a discount by using your credit card, or you have free insurance on purchases made using your credit card.

 In the credit card business nothing is free. If there are rewards offered the cost will be built in somewhere (usually a higher interest charge) so compare with other cards not offering the same rewards.

 7. Credit Card Payment Insurance

 Whether you take this option or not most cards now offer some sort of payment protection insurance in the event of sickness and disability. In the past this cover was limited to paying the minimum monthly payment however many cards now pay 10% of the balance on the card at the time your claim commences and may be worth considering.

 Be very careful with this insurance as it will exclude any condition you suffer from when the cover commences and similarly any redundancy announced before the cover commences.

 Taking out a new credit card is more complex than it seems at first. As you can see when considering a new credit card there are a number of aspects which must be taken into account and t can be very difficult choosing a new card.

 There are many comparison services available that can help you cut through the confusion and I suggest you consult one or more before making your decision.

 In all cases prioritise your requirements and only apply for the credit card which best matches your circumstances. Don't just pick the card with the longest balance transfer period or lowest interest rate as it may cost more in the longer term.

5 ways to get a higher credit card limit

A lot of credit card holders aspire for a higher credit card limit.

 But: credit card holders need to remember that to get a higher credit card limit, they must abide by the terms and conditions of the credit card company or their bank.

 Here are 5 ways to get a higher credit card limit:

 1. Prove your credit worthiness

 The most important thing to do for getting a higher credit card limit is to prove your credit worthiness. This is the first thing that banks and companies look for when giving a higher credit limit.

 2. Attract positive attention from the credit card company

 At least: try to attract positive attention by paying finance charges once in a while. Obviously, this is not advisable on a repeating basis and should only be used as a last resort to increase your chances of getting a higher credit limit.

 Proving to credit card companies and banks that you are good "borrower" can be a convincing way to get a higher credit limit. But be careful because this strategy also means that you will be paying finance charges which can accumulate in a hurry.

 3. Always spend within your credit card limit

 Doing so means that you are capable of controlling your expenses.

 4. Use your credit cards regularly

 Don’t keep your cards for emergency use only. If you use your credit cards sparingly, banks and credit card companies will be unable to understand your spending and pay-back behavior. Under these circumstances, most banks and credit card companies will be reluctant to give you a higher credit card limit.

 5. Avoid late payments as much as possible

 This technique will not only increase your payment increase, but you may also have to pay an additional fine for not clearing bills on time. This will also dim your chances of getting a higher credit card limit.

 The bottom line is that your performance in the records of banks and credit card companies will determine whether you’ll get a higher credit card limit or not.

Why Poor Credit Scores Could Be Costing You Money?

Most of us want a good credit report to obtain automobile financing, credit cards, and to purchase a home. But, beyond these consumer loans, your credit report can cost you in everyday living expenses. What you don't know about your credit could be costing you money.

 Having a credit card means that you can order tickets, rent a car, and reserve hotel rooms. Besides these conveniences, your credit report can mean that you must pay higher deposits and fees for everyday services.

 Did you know that your credit history can keep you from getting utility connections, good telephone rates, the best auto insurance, home owner's insurance, or even keep you from getting hired?

 1. Some utility companies set minimum standards for service connections. If your report shows collection accounts for prior utility bills, you may not be eligible for service at all. And if utility companies do agree to connect your service, you'll need to pay a higher deposit than another customer with good credit who may not need to make any deposit.

 2. The same requirements exist for telephone services. People with a good credit history don't need to pay deposits for home telephone or cell phone services. When we first got a cell phone with poor credit scores, we had to pay a $300 deposit, for one cell phone. After fixing our credit, we got eight cell phones for our business, with zero deposits.

 3. What many people don't realize is that good credit enables them to get better insurance rates. High-quality, low-cost home owners’ insurance, auto, and life insurance companies set minimum credit standards for their policy holders; this means that consumers with poor credit have to pay more for less coverage. Many automobile insurance companies now base your monthly premiums on your credit score; these companies offer a 17% discount if your score is over 625 and a 25% discount if your score is over 725. Why? Because according to their studies, people who are careful with their credit are also careful with their property and careful drivers.

 4. Bad credit can cost you a job. More and more employers run an applicant’s credit report and hire the person with better credit, assuming that better credit equals better integrity and character. A friend of mine with a Master's Degree and a 4.0 grade average did not get hired; she was told her credit score didn't meet their minimum standard and that they hired another person with less education.

 5. Poor credit scores means you pay more for your home financing. Mortgages cost more in upfront fees and interest rates for those with low credit scores. How much can you save? A mortgage loan of $150,000, 30-year, fixed-rate mortgage, interest rate of about 5.72 percent costs around $870 a month; poor credit scores raise the interest rate over 9 percent and the payments over $1,200. As you see from these payment differences, good credit means that you can finance a more expensive house with the same income, or save $330 each month.

 Boost your credit score so you can save money on everyday expenses, get high-quality insurance, and the best mortgage financing.

Few things you should know before making a card application online or by phone

At the rate how mailboxes are bombarded with credit card offers, it’s probably amazing for anyone not to have considered these cards at least once. Nonetheless, credit card companies now make it even easier for consumers to apply for a credit card through instant approval card applications. There are a few things you should know before actually making a card application online or through the phone.

1. You need a good credit history

In order for quick approval, it is essential for a potential user to possess a good credit history. This means that the user pays his bills on time and does not have any financial hiccups in his credit report. The credit report is obtainable from a credit bureau, which will be contacted by the card company at the time of the application. If all goes well, the credit card will be approved within minutes.

2. Interest rates corresponds with the health of your credit report

If your credit history is not something you are proud of, there is a slight possibility that your application will not be instantly approved. You don’t have to worry if this occurs though, as these companies may make allowances for you due to high competition in the credit business. Most of the time, they will just charge you higher interest rates as you are of a greater risk. Also, due to the extra qualification process, the arrival of your card may be delayed.

3. You need to wait a few days for the card to arrive

A common misconception with these cards is that the applicant will instantaneously receive the card upon approval. No matter how fast your Internet connection is, the card is delivered in an envelope, not in bytes. Thus, it is not a very good idea to have an urgent transaction depend on these card applications.

4. You need to do your research 

Do not let the convenience of getting a quickly approved credit card cloud your judgement on your selection of a credit card. It is not worth making higher payments in exchange for a shorter wait for a credit card.

5. You need to find a secure connection to submit your personal information.

As with all forms of online transactions, you should never use a public computer to submit your personal information. With the recent spat of identity thefts, it is wiser to be safe than sorry, especially when it comes to credit cards. 

Some new and interesting credit cards

In this day and age, a large number of the population is in possession of a credit card, sometimes even numerous credit cards! Banks and businesses are becoming more and more aware of consumer’s desires for specialised credit cards, and have thus introduced a myriad of credit cards that are joint ventures between banks and businesses. There are credit cards aimed at men, and credit cards aimed at women.

 If you’re a sports fan, for instance, then you can’t go past the NASCAR credit card. Or there’s the NFL credit card, the World Series of Poker credit card, the MLB credit card, and the Bass Pro Shops credit card. People who love to travel would be interested in the British Airways credit card, or the World Perks credit card. If you like your cars, then the Subaru credit card, or the Volkswagen credit card is for you.

 With the price of gas escalating out of control in the current world climate, gas reward credit cards are in big demand! Two such cards available at the moment are the Speedway SuperAmerica credit card, which lets you earn up to an 8% rebate on all gas and merchandise purchased at Speedway, SuperAmerica, and Rich Oil locations; and the HESS credit card, which lets you earn up to a 10% rebate on all HESS purchases.

 For women, the Starbucks credit card is bound to be a favourite! As is the Borders and Waldenbooks credit card, for all people who enjoy reading. There are even credit cards for entertainment – both the Sony credit card and the Universal Entertainment credit cards provide fantastic rewards programs. If you have children, there’s also a credit card for you – the Toys "R" Us credit card can earn you awesome rebates!

 Of course, when it comes to choosing a credit card suitable to your needs, it is important to read the fine print, and not just choose a card because it looks 'pretty'.