Credit Cards Overview

Although numerous problems, such as fraud and deception, are associated with credit cards, such plastic monies are normally very handy and definitely be of great help in the financial dealings of people having them.

Credit Card Complimentary: Among the various benefits of using a credit card, the several sops or free things offered by the credit card companies to persuade people to obtain or use specific plastic money is prominent. In fact, the credit card firms do not fancy competitions with their business rivals by compromising on the interest fees and other expenses related to acquiring a credit card. As a result, they offer other freebies to the consumers as that are practically cheaper to them in comparison with reducing interest rates and the fees charged for the credit cards. In fact, quite a few of these freebies offered by the credit card companies are often very useful to the consumers provided they continue to clear their dues in full every month. On the contrary, if one does not pay the balance amount regularly each month, the huge interest on the money used up that the card holder will be required to pay to the credit card company will surely overshadow the worth of the free stuff offered by the company for using their plastic money.

Different credit card companies offer different freebies, each trying to outsmart the other in luring the consumer to use their specific plastic money. Again, some freebies are very common and offered almost by all companies. In fact, the free stuff offered by the credit card companies is a part of their marketing strategy. Some of the freebies offered by the different credit card companies are as follows:

Cash discount on purchases:

For instance, many credit card companies offer their consumers one per cent discount on the total yearly purchases made with the card and summing up to a specific amount. At the same time, lesser discounts are offered on a lesser yearly purchase amount. The consumer is given a credit or a cheque in lieu of the discount amount at the end of each year.

More purchase rebates (normally on store or store/ bank hybrid cards):

An ideal example of this is Bloomingdale offering bonus points that may be combined to gift certificates for every purchase on credit. On the other hand, Eddie Bauer dispatched gift certificates worth $10 or more that can be reduced from the amount of the next purchase when the consumer uses its card for making credit purchases worth a few hundred dollars. Such discounts may total up to a considerable amount when a credit card user makes substantial purchases on credit from one particular retailer.

Frequent-flier bonus mileage:

This program offers you a two per cent discount on anything you by using a credit card. Almost all the major airlines worldwide have partnerships with different credit card companies for their frequent-flier schemes. The credit cards used to avail this facility are bank cards and not circulated by the airlines themselves. Anyone interested in joining the frequent-flier programs may collect an application form at the airdrome or the city ticket office of any airline. When you have acquired any of these airline-sponsored cards, you will be entitled to receive a frequent-flier mile for every dollar that you spend on credit. Usually, the frequent-flier mile for every dollar spent on credit is worth two cents. As you can make use of your frequent-flier Visa or MasterCard to purchase almost anything now, you are entitled to free miles on everything you purchase on credit. In fact, the American Express and Diners cards also offer parallel benefits with some additional advantage - the miles earned by you using the American Express and Diners cards do not expire within three years or something similar, as opposed to many other frequent-flier cards.

Two-for-one flights around the country:

It is interesting to note that many airline cards provide a two-for-one flight coupon as an incentive to apply for their cards. You are entitled to the benefit if your application for their cards is accepted. In fact, this offer could benefit you by some hundred dollars. While the American Airlines scheme had done this quite often, this offer is usually made to new members of any airline's frequent-flier club through mail. The offer is included in the welcome package sent to all new members and obtaining a membership of the 'two-for-one flights around the country' club is easy. One just needs to fill in an application form and submit it to the club. Hence, when you join any airline's club, you may perhaps receive such a two-for-one coupon offer.

Free commodities:

Several credit card companies offer free commodities by the way of bonuses. This practice is more common during the winter vacations when the offers are mailed to the consumers or card holders along with the seasonal greetings.

All things are negotiable:

It is always important to remember that the credit card firms spend heavily on their marketing projects with a view to find new consumers. And if you are among those credit card holders who pays his/ her monthly bills regularly and makes heavy expenditures on credit, no credit card firm would ever want to lose you. You are supposed to be a valued customer for the credit card companies. In such a situation, if you feel that the interest rates charged by your credit card company is vey high, just call the customer service department and tell them to lower the interest rate. And in case the credit card company has penalized you for making late payments or has charged a fee for a bounced cheque, demand that the penalty or fee is withdrawn. Remember, you will not lose anything by asking your credit card company to concede your demands. On the other hand, there may be situations when you will be a winner. And this may occur frequently.

Financial union

Possessing a credit card and in some manners the back up of the privacy problems they fetch may possibly assist you in putting your business and personal funds in order. When you rate all things that you probably are able to, you will have an approximately absolute documentation together with your checking account register of how you spent your money. It is important to note that such a practice may prove to be very useful while paying taxes.

Stop-payment privileges

The credit card holders' exclusive privilege to issue a stop payment order is possibly the greatest benefit of using the plastic money. In fact, the stop-payment rights enable the credit card holder to keep away from being stuck in different kinds of purchases. For instance, people having credit cards normally make payments through the plastic money while purchasing items by mail or phone order. Contrary to making payments through cheques, when one makes a payment for a mail or phone order purchase, he or she is unlikely to be duped by the seller. In the event, they do not receive the precise item they had ordered for; people using credit cards can stop the payment on the invoice and get a refund of the entire money.

Better credit score

Using credit cards have other advantages too and a better credit rating is one such benefit. When an individual regularly uses his or her credit card to make payments for purchases and is punctual in making all payments, it helps the user's credit card rating by demonstrating that he or she fulfills their credit obligations in an appropriate manner. On the contrary, when the credit card commitments are not fulfilled in an opportune method, the credit card rating of the individual in harmed.

Fewer visits to bank

Credit card users enjoy another important advantage and do not have to make frequent visits to the banks whenever they require money. Visiting the bank every time you need cash is no doubt an annoying task. In addition to avoiding such frequent visits to the bank for cash and be able to make payments for purchases with plastic money, the credit card users are able to avail cash in advance. This is especially a great advantage during the weekends when you are away on vacation and nowhere near the bank that maintains your checking account.

Boundless assurance, theft and damage security

Several credit card providers offer theft, damage and other service contract (warranty) security on making payments for purchases by means of their plastic money. Such prearrangements are very useful advantages that many of us frequently do not remember at times when they may actually be helpful. For instance, if a home computer purchased with a credit card crashes within two weeks after the expiry of the manufacturer's warranty, the free warranty offered on the purchase of the credit card will most likely pay for the expenses incurred in repairing the computer provided the buyer retains the original purchase receipt. In order to avail the benefits of the warranty and protection against theft schemes, the credit card holder needs to meticulously follow the rather complicated rules of the credit card issuing firms.

Facility to pay for bargains

Possessing a credit card enables the holder to grab any bargain irrespective of whether is a couch or a trip to Paris right away. While paying for the bargain with the credit card, you need not be concerned whether your cheque will be bounced back by your bank.

Float

When you pay for your purchases through a credit card, the purchased items are likely to cost lesser. Hence, Float is described as the use of money that the credit card holder has used up prior to paying the expense invoice. In fact, the credit card holder is free to use that money to earn interest for till it is time to pay the invoice or bill.

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