Credit Cards - Cashback Secrets

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Guide To Credit Cards
We all know we should scrimp and save for that new sofa, that much-needed family holiday or that special birthday present for a loved one - but nowadays, few of us really want to wait. Let's face it - we live in a buy-now-pay-later society. Credit Cards offer an easy way of borrowing for our everyday needs. What's more, your newfound flexible friends will even shoulder existing debt for you!
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Prevent Credit Card Abuse
The season has officially begun. This is the time of year Americans flock to the mall in droves to catch all the bargains that retailers have to offer. The reason of course is to find those perfect gifts, along with the satisfaction of finding a great deal. Yet when the credit card statements arrive over the next few months, many consumers will find that they once again over extended their budgets... Read credit cards article



Credit Cards - Cashback Secrets
For several years now, one of the most sought after features on a credit card has been a long 0% balance transfer deal, almost to the exclusion of any other feature except maybe the headline interest rate of the card. More recently though, balance transfers have become less popular, not least because of the introduction of transfer handling fees, and there's now a new feature that more and more customers are considering to be of higher importance, namely cashback.

According to recent research, over a fifth of us now use a card that offers cashback or a rewards scheme, and the number has recently overtaken that of balance transfer users for the first time. So why has a seemingly simple feature such as cashback displaced the once mighty balance transfer deal in our priorities?

Credit cards have always suffered from the perception that they are expensive to use, with high interest charges and penalty fees - a reputation, it has to be said, that isn't altogether undeserved. Cashback cards give us the opportunity to turn that on its head, and actually come out on top financially by using our cards for everyday purchases.

For every purchase you make, a cashback card will effectively give you a refund of a small percentage of the purchase price. In the early days of cashback, this percentage was so small it was hardly worth considering - a 0.25% rebate was virtually worthless to most people with moderate spending habits. These days however, the figures are much more attractive, with a 3% rate not uncommon as an introductory offer. This kind of rebate is definitely worth having, and if you use your cashback card for all of your day to day shopping, the numbers can mount up surprisingly quickly.

What's more, if you use your card purely as a convenient payment method and not as a means of borrowing, and repay your full balance every month, then you'll avoid paying any interest fees or charges. This means that the money you 'earn' through cashback is totally free money - you're being paid simply to buy your usual shopping with a card rather than with cash.

Sounds good? Well, it's not hard to see why this kind of card has increased in popularity, but there are a couple of points to think about before applying for an account.

The main problem is that most of the time, you'll only receive your cashback once a year, either by check or refund to your account. This is fine for most people, but the cashback offer will be dependent on you sticking to the credit agreement. If, even accidentally, you make a late payment then you'll have broken the terms of your agreement and will lose all the rebate you've been building up. Keeping up to date with your repayments is therefore even more essential than normal with a cashback card.

Secondly, many cards feature a 'spending limit' over which no cashback will be earned. Most such limits are fairly generous, but check to make sure your expected annual spending on the card is within this limit if you want to maximise how much total rebate you can get.

So, are cashback cards the future? If you're a regular spender who can clear your balance in full every month, then they are very worthwhile indeed, but if you're planning to carry a balance then you might be better served by getting a card with a lower standard rate and no cashback or rewards feature.

Michael Strauss has been writing on personal finance for several years and currently writes for CardSense UK, your source for credit cards, cashback credit cards and 0% balance transfer offers.

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Zero APR Credit Cards

I know it sounds crazy but it's possible to get out of debt by using 0 APR credit cards. The zero APR credit card is a special no interest rate offer that comes from different financial institutions looking for new business. These cards usually offer an extremely low or no interest rate charge during an introductory period. During this introductory time, you aren't charged any interest on the balance owed.

The zero rate cards also allow for transferring your old balance from a high interest rate card to your new lower rate card. This means that you can take your $5,000 dollar credit card balance on your old card that was charging 18 to 24% interest and move it over to the new card at the introductory rate.

Moving a high balance credit card to one of these zero APR intro rate cards can save as much as $100 a month. Now consider that if you take that hundred dollars a month and pay down the total amount owed, even if the temporary rate was six months, you saved $600 dollars.

The good thing is that all you had to do pay down that extra $600, was the continued to make the exact same monthly payment but on the new credit card. The extra money instead of going to interest simply went to pay down the total principal owed.

Another wise financial decision you can make is that once you transfer your credit card balance to the zero APR credit card, close your original high interest rate card account. Having too many credit cards or credit lines available can actually lower your total overall credit score. Closing the high interest account makes sense because it keeps you from continuing to use that card.

One of the worst things anyone can do when using zero APR credit cards as a financial tool is to keep the high interest rate card active in continuing to use it. This is a common mistake of many young adults who instead of using careful budgeting strategies make the assumption that they can handle credit and end up with yet another increase in credit card debt.

Credit card interest rates are getting absolutely ridiculous. To make matters worse, the financial companies behind these cards are charging exorbitant fees whenever they can. This means that if a payment is somehow late, not only do they charge a huge late fee but can also raise your interest-rate. It's in everyone's best interest to get out of credit card debt as quickly as possible, and using zero APR credit card offers can be a good strategy.

Abigail Franks writes on a variety of subjects which include family, health, and home.




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