When deciding if a credit card is right for you, consider these four benefits: convenience, discounts, liability protection, and cost. Remember that a credit card is only useful if you use it responsibly and pay it back. In this article, we’ll discuss each benefit in turn. After reading through these points, you’ll be a wise credit card user in no time. Here’s how to make the most of your new card!
1. Discounts
When considering whether to offer discounts for using a credit card at a store, think about the costs involved. If you have a large card balance, the extra cost of processing transactions might not justify the discount. A similar study shows that merchants should refrain from offering discounts for cash and debit card transactions. Regardless, it may be worth considering the benefits of a discount over a surcharge. It may also be worth considering the advantages of the program for the store.
Store credit cards are attractive because they often offer rewards and discounts on purchases. These rewards of American express platinum cards may save you money in the long run. However, be sure to consider your spending habits before signing up for a store credit card. These cards generally carry higher interest rates than most cards, have lower credit limits, and may only be valid for purchases made at the store that issued them. If you use your credit card frequently, this discount may not be worth it.
2. Liability protection
Credit card companies offer several liability protection benefits to their customers. The purchase protection benefit, for example, allows consumers to receive reimbursement for any lost or damaged items. The purchase protection benefit covers any purchase made with the card used to make the claim. However, consumers should be aware that the benefit may not cover all items, including the screen of a cell phone. For these benefits to apply, consumers should read the fine print carefully.
If you choose to decline the rental insurance provided by the rental agency, you will receive reimbursement up to the cash value of your car. However, there are certain conditions, such as if the rental car was damaged in an accident, and it may not cover all damages. Moreover, your personal insurance policy will be tapped first, and it may increase your rental car rates. You should review the policy carefully before making a rental, as many companies limit the amount of coverage that they offer.
3. Cost
Most cardholders are unaware of the terms and conditions of getting and using credit cards. There are two types of credit card users. The first group finds the conditions easy to meet while the other find them restrictive. The costs, on the other hand, are generally reasonable and can be justified by the convenience of being able to buy when you do not have cash. Most cardholders think the biggest benefit of having a credit card is that it helps them keep less cash.
Another common fee is over-the-limit fees, which have little or no benefit. To avoid these fees, set alerts so you know when you are about to reach the credit limit. Also, stay below 10% of your credit limit. Otherwise, your payment may get returned and cost you up to $40. The cost of using a credit card is higher if you are late on payments. You can save money by not overspending, and by paying off your bills each month.
4. Monthly scrutiny
Using a credit card without a monthly bill can cost you a lot of money in late fees. Depending on the credit card provider, the fee could be as high as $35, and the interest rate may also increase if you’re late. So you need to carefully scrutinize any fees you see on your credit card bill every month. Check out all the fees you can, including foreign transactions, cash balances, and annual fees. By paying your bill on time each month, you’ll avoid any unnecessary surprises.