What to Look for in a Credit Card
You have probably heard that new credit card legislation has now been enacted. Credit card companies have been under the gun because of their rate changing practices as well as their disclosure practices. However, with new laws in place, credit card companies will be looking for more creative ways to charge consumers fees. There are still a lot of good offers related to credit cards, especially if you have good credit.
If you are a person who has good credit and routinely pays off the balance each month, you definitely should consider some type of rewards card if you are not already using one. There are many types of reward programs ranging from cash back cards to airline mile cards. The one thing to watch for is the annual fee. There are still some cards that do not have an annual fee but there are plenty that do. An annual fee is not necessarily bad, but you need to keep that in mind when determining the overall value of the card to you.
For example, let’s say you put all your expenses on a credit card and you pay the balance each month. If you spend $2000 per month, on average you are going to earn 24000 points per year in some type of reward program. That is probably equates to about $300 to $500 worth of rewards depending on the type of program you have. If you pay $50 annually for that credit card, you are still coming out ahead in the long run.
Airline reward cards have long been the standard by which people have accumulated points. In the last several years, airlines have become increasing stingy in the number of award flyer seats that they put on flights. While you can certainly get a domestic flight for 25,000 miles, plan far in advance if you want to use that on certain dates. Let’s say you want to go visit family across the country over Christmas. That 25,000 mile ticket will be almost impossible to use because of blackout dates. During the Christmas season the airlines are full, so why open up seats for free? If your travel dates are flexible, an airline reward card may be better for you. If you are not as flexible and have to schedule most travel in summers or around Christmas holidays, an airline reward card should probably not be your card of choice.
Most of your cash reward credit cards do not have an annual fee. You simply earn cash because you use the card. There are a lot of these cards in the industry, and most tend to start with 1% cash back. However, some will increase that to 2% if you reach a certain spending level over the year. Also, some will give you up to 5% cash back in certain categories, like groceries or gasoline, so that is that can be great deal.
You are going to find things more difficult if you are one of these people who are trying to play the balance transfer game. Low annual percentage rates over a short period of time are called teaser rates. Under the new credit card legislation, credit card companies cannot offer teaser rates for less than 6 months. The most important thing to understand if you are transferring a balance or keeping a balance on a card past the teaser rate time is the annual percentage rate after the teaser rate expires. In a lot of cases these rates jump to well over 19%. However, if you shop around, especially looking at smaller regional banks or credit unions, you can find rates around 10%. Still pretty high, but much better than 19% or higher.
Access your needs before getting a credit card. While the great credit card deals that most of us frequently got in the mail several years ago are now gone, you can still find cards that meet your needs if you do your homework.
You have probably heard that new credit card legislation has now been enacted. Credit card companies have been under the gun because of their rate changing practices as well as their disclosure practices. However, with new laws in place, credit card companies will be looking for more creative ways to charge consumers fees. There are still a lot of good offers related to credit cards, especially if you have good credit.
If you are a person who has good credit and routinely pays off the balance each month, you definitely should consider some type of rewards card if you are not already using one. There are many types of reward programs ranging from cash back cards to airline mile cards. The one thing to watch for is the annual fee. There are still some cards that do not have an annual fee but there are plenty that do. An annual fee is not necessarily bad, but you need to keep that in mind when determining the overall value of the card to you.
For example, let’s say you put all your expenses on a credit card and you pay the balance each month. If you spend $2000 per month, on average you are going to earn 24000 points per year in some type of reward program. That is probably equates to about $300 to $500 worth of rewards depending on the type of program you have. If you pay $50 annually for that credit card, you are still coming out ahead in the long run.
Airline reward cards have long been the standard by which people have accumulated points. In the last several years, airlines have become increasing stingy in the number of award flyer seats that they put on flights. While you can certainly get a domestic flight for 25,000 miles, plan far in advance if you want to use that on certain dates. Let’s say you want to go visit family across the country over Christmas. That 25,000 mile ticket will be almost impossible to use because of blackout dates. During the Christmas season the airlines are full, so why open up seats for free? If your travel dates are flexible, an airline reward card may be better for you. If you are not as flexible and have to schedule most travel in summers or around Christmas holidays, an airline reward card should probably not be your card of choice.
Most of your cash reward credit cards do not have an annual fee. You simply earn cash because you use the card. There are a lot of these cards in the industry, and most tend to start with 1% cash back. However, some will increase that to 2% if you reach a certain spending level over the year. Also, some will give you up to 5% cash back in certain categories, like groceries or gasoline, so that is that can be great deal.
You are going to find things more difficult if you are one of these people who are trying to play the balance transfer game. Low annual percentage rates over a short period of time are called teaser rates. Under the new credit card legislation, credit card companies cannot offer teaser rates for less than 6 months. The most important thing to understand if you are transferring a balance or keeping a balance on a card past the teaser rate time is the annual percentage rate after the teaser rate expires. In a lot of cases these rates jump to well over 19%. However, if you shop around, especially looking at smaller regional banks or credit unions, you can find rates around 10%. Still pretty high, but much better than 19% or higher.
Access your needs before getting a credit card. While the great credit card deals that most of us frequently got in the mail several years ago are now gone, you can still find cards that meet your needs if you do your homework.