Posts Tagged ‘Incentives’

When it comes to credit cards, not everyone is worry-free. Even those who own reward credit cards often find themselves in a difficult situation. Instead of enjoying incentives and savings from their reward credit cards, some people are having problem keeping up with their bills and not getting any reward at all. Why?

One major reason is that reward credit cards come with very high interest rates. Some people spend more on their reward credit card just for the purpose of collecting points without paying attention to their monthly balances. As a result, they have to put off their monthly payment and get charged with a high interest.

It is easy to lose control of your spending if you dont have a sense of obligation and self-discipline. One thing to remember about reward credit cards is that the rewards should come as a bonus, a perk, an incentive. It should not be the primary reason that drives you to spend more on your credit card than what you really can afford.

When using your reward credit card, you still need to be aware that youll need to pay back your purchases at the end of each month. Or else, you will be charged with an expensive interest rate which puts additional burden on your budget. Furthermore, if you often incur unpaid balance in your account, you can lose your chance of redeeming your rewards. Yes, credit card issuers have the right to change, stop or disqualify you from claiming rewards if you violate stipulations in the agreement. And some reward credit cards require their members to settle their monthly accounts to qualify for rewards. Thus, be sure that the expenses you make in your account are within your means, and that youll be able to pay it back on or before the due date of payment.

Another way to use your reward credit card smartly is by taking advantage of the 0% introductory offers. If your reward credit card offers a 0% APR on balance transfers, this is your chance to transfer over your high interest balances from other credit cards and pay them off while theres no interest charged. This way, you can focus on paying the actual amount you owe without worrying about interest costs. Just make sure that youll be able to pay off all your balances before the 0% introductory period ends.

Of course, you still need to collect points to earn rewards. How can you earn more points without necessarily going beyond your budget? This is by choosing reward credit cards that matches your spending. For instance, cash back reward credit cards give points for all types of purchases. If you have a cash back reward card, use it to pay your monthly utilities such as telephone bills, cable, electricity, mortgage and other monthly that you have the obligation to pay one way or the other. If you put these bills together, you can earn more points in your account while making sure that you pay off all your duties accordingly.

Understand the terms of your reward credit card carefully. There might be some options about earning points that you might have missed or there might be some restrictions on collecting or redeeming rewards that you should be aware of. In any case, it would be to your advantage if you know and understand correctly all terms included in the credit card agreement you signed. Even if youve had your reward credit card for some time and you think you know everything, its still a good idea to review the terms and conditions of your card.

How to use your credit card to establish a good credit history

If you’re young and just starting out credit cards are certainly convenient and can help you establish a good credit history, which will be important when you need to make major purchases down the road. However, carrying a credit card comes with big responsibilities. Here are some tips on how to use your credit card wisely.

Choosing the right credit card

When selecting a credit card, you should consider your own needs. For example, if you’re going to be carrying a balance (not paying off the entire bill each month) then it is imperative to seek out the lowest interest rates that you can find. But you may be limited by a few circumstances, one of which is your paycheque. Some credit cards require a minimum income level or charge an annual fee.

High limit credit card could be a recipe for disaster. Signing on the dotted line is fun. No money comes out of your bank account and no cash comes out of your wallet. Shopping has never been so easy. Thats why when starting out the best credit cards are the ones that have low spending limits, unless you can afford to pay for any of the charges that are made on it.

Just about all credit cards offer some type of incentives such as rewards points or cash back incentives. This is done for obvious reasons. The most common of which is to entice the cardholder into using it more often. Overall it is a pretty good deal to receive rewards for credit card charges as long as you bear in mind that this is not free money. Whether you realize it or not, you have already paid for those points.

Managing your account.

Managing your account online is a great feature; just about every body has access to the Internet and can easily access their credit card statements.

Studying your credit card statement

You’ll receive a statement that details what you’ve bought and what you need to pay. The purchases you’ve made will be tallied, just like on a bank statement. You’ll need to pay attention to:

The amounts – Make sure your purchases are listed correctly by comparing the amounts to your own purchase receipts. Doing this will help you understand where your money is being spent and help you adjust your spending patterns.
The balance – If for any reason your statement seems a lot bigger than you thought it would be, you may be heading into a danger zone. Keep your balance within a range you can afford to pay off every month. And remember to save some credit for emergencies.
The minimum payment – You need to pay this amount each month toward the entire outstanding balance. Making substantial payments every month will help you keep the interest under control.
The purchase interest – This is how much you’re paying on purchases that have not been paid off in full by the payment date. Whenever you carry a balance forward from the previous month, you’ll pay this monthly interest.
The payment date – When you are busy and responsible for many bills, it’s easy to forget when everything is due. However, paying bills on time is crucial to maintaining a positive credit record. Over time, it could mean the difference between being approved or denied for other credit, such as a car loan or a mortgage. Many credit card companies advise making payment a few days before the specified payment date to ensure receipt. Another option is to pre-pay your bills using telephone or Internet banking.

Staying out of the danger zones

It’s a good idea to avoid the following, despite the temptation:

Cash advances – You’ll pay interest on a cash advance from the moment the cash is in your hand. You may also be charged a service fee. Cash advances are great for emergency cash but avoid using them as an income supplement.
Hitting your credit limit – There are many reasons why hitting your credit limit can be dangerous. If you don’t have the money to cover your purchases, you will definitely feel the discomfort that a large balance brings.
Impulsive purchases – Think about the purchase and why you are buying. Do you really need it? Don’t let the ease and convenience of credit be the driver for purchasing the item.
Overusing the card – Credit cards aren’t a substitute for saving and budgeting. When you can’t afford to go to the movies, don’t think of your credit card as a saving grace.

Use Your Credit Card as a Tool

A credit card can be a tool that you use to your advantage. If you play your cards right you’ll prove to creditors that you are a person who can take care of business in a mature and responsible way. And a few years down the road, you’ll have a good credit history. Now that’s impressive.

For people who are organized and careful, using a credit card can be a good way of managing debt and handling spending. And there are other advantages that can make credit card use even more appealing.

Many credit cards can now be used to contribute to people’s favourite charities. This means they can spend as usual, secure in the knowledge that they are also contributing to a good cause.

How Charity Credit Cards Work

The way charity credit cards work is simple. Every time people spend on the card, the card issuer gives a proportion of their spending to the chosen charity. The charitable donation can range from 0.25% of the amount spent on purchases to 1% or more, depending on the card chosen and the particular deal. The amount donated may increase if spending goes over a certain threshold.

Many card companies also offer a one-off donation when the card is first issued. Again, this sum can vary considerably depending on the card chosen. There are also rewards for using the card within a set period and for continuing to use the card over months and years.

Some credit cards contribute to specific charities and are branded with the name of that charity. There are also credit cards that allow card holders to nominate the charity their donations will go to.

Other Incentives

Having a charity credit card does not mean giving up on some of the other incentives new credit card holders normally get. Many charity cards offer 0% interest free periods on balance transfers for up to nine months. Some also offer 0% on spending for a certain period. Others offer a fixed low interest rate. People can shop around for the best incentives and still make a charitable contribution. Standard interest rates for charity credit cards have the same range as normal cards, ranging from below 9% to over 17%.

What Charities Can I Support?

There are many charity cards available, supporting a wide range of charitable causes. These include the RSPCA, NSPCC, and cards supporting animals, diabetes, cancer and a wide range of medical conditions. Charities always need more cash to support the work that they do. Using a charity credit card means that people can help their chosen charities while doing what they would have done anyway.

How Else Can I Help My Charity?

Another strategy that credit card holders can use is to choose a credit card that offers a cash back facility. This means that holders get a percentage of their spending as cash at the end of a given period. This is usually once a year, often on the anniversary of taking out the card. Cash back percentages can be quite high, depending on the level of spending. Organized borrowers can spend on their cards and donate the cash back reward to charity as well. This is another good option for lending support to a favourite charity.

How to Make the Most of Your Credit Card Rewards

Many great credit card companies are now offering their loyal cardholders credit card rewards. This provides the cardholder an opportunity to gain prizes just because they use their card. It is a great incentive for those that may not use their card much. The more credit card rewards they will receive, the more likely they are to use their card more frequently. Credit card companies realize that they profit more when cardholders use their cards more, and so the process is profitable to all involved.

Programs

Each card that offers credit card rewards will have slightly different programs than the rest. Some will offer a cash back reward, which is essentially giving the cardholder a certain percentage of their spending amount back. This is usually done annually or may be done monthly. These cards are great for those who use their cards frequently but dont have time to deal with points and other credit card rewards other cards may offer. Some credit cards rewards will be offered in the form of sky miles or other flying incentives.
These credit card rewards are perfect for the cardholder who travels frequently. If the cardholder is saving up their points for a free flight, they will be much more likely to use their card rather than cash. Other credit card rewards include other miscellaneous prizes. Some cards will allow their cardholders to choose from a selection of prizes.

Making The Most Of Rewards

The best way to make the most of your credit card rewards is by simply taking advantage of them. Credit card companies are amazed at the amount of cardholders who never redeem their rewards. They use their cards frequently and accumulate prizes, however they never take the time to get the prizes. The thing about credit card rewards is that unless you have a cash back program, you have to contact the company to get your prizes. Many cardholders forget about the programs or simply dont have time to deal with them. If you do have your eyes on a prize, then you can make the most of the credit card rewards programs by using your card frequently. Use your card instead of cash and simply pay off the balance before any interest collects. This way you can get closer to your prize without being out any extra cash.

Credit card rewards are a wonderful way to get excited about using your credit card. Those who usually carry cards filled to their maximum and who only pay the minimum each month may not be as excited about the credit card rewards. Unless you are able to use the card, you will not benefit. So, if your card has reached its maximum balance, work on paying it down to start benefiting from the credit cards rewards programs.

How To Keep Your Credit Card Interest Rate At 0%

We’ve all been tempted by 0% credit card interest rate offers. These offers are usually for short periods of three to 12 months and there are usually conditions attached. For example, the preferential rate may apply to balance transfers, but not to cash withdrawals. The low interest rate may not apply to credit card cheques or purchases either.

People who are carrying a large debt will want to make the most of 0% interest rate offers. Here’s how to keep your credit card interest rate at 0%.

Researching 0% Credit Card Deals

First of all, it is best to research the credit card thoroughly. Consumers need to find out:
- what period the 0% interest rate is for
- whether it is for balance transfers only
- whether it applies to other spending on the card
- what the rate is for cash withdrawals or credit card cheques
- whether there is a balance transfer fee
- what other incentives there are for using the card

Answering these questions will help consumers to decide which 0% credit card is right for them. It is especially important to pay attention to the period that the incentive offer lasts for. To keep paying 0% interest, consumers will need to apply for a new 0% credit card a month to six weeks before the old offer runs out. This leaves time to get the card, activate it and transfer the balance without incurring any additional fees from the current credit card company.

Rate Surfing Benefits

Moving from card to card, or rate surfing, is a common way of keeping interest rates low and paying off as much of a debt as possible. Using a 0% card means that any money paid is reducing the outstanding debt rather than paying interest. This is good news for consumers’ long term financial stability.

Of course, there’s no guarantee that consumers will be able to get another card. This will depend on their credit profile. The best way to maintain a good credit profile is to have some credit card debt (but not too much) and to make all payments on time. This will show credit card companies that you are a good credit risk.

Watch Out For Balance Transfer Fees

Credit card companies do not like credit card tarts, another term for rate surfers, because they lose hundreds of thousands of pounds’ worth of income that they would normally gain from interest. As a result, many credit card companies take their money up front by charging a balance transfer fee of around 2% of the balance transferred. Even with this fee, savvy consumers should be able to shop around for the best rates and pay much less interest than they would normally have done.

In addition to the incentive of a 0% interest rate, consumers can also benefit from other rewards. These include points that can be used for travel, earning vouchers, cash back and charitable contributions. This means that consumers can reduce their outstanding debt and gain a reward as well.

Avoiding Credit Card Wipe-outs: How To Succeed With Rate Surfing

Rate surfing can be a good way of reducing debt but there is a risk. To avoid long term damage to your credit rating, it’s best to make sure you do it right.

Rate Surfing Research

First of all, start by researching the current credit card rate offerings to see which one is best for your circumstances. Many people opt for the 0% interest deals, as these allow them to apply the payments the make to clearing any outstanding debt. These deals usually last for a limited period (between three and 12 months), so canny rate surfers will need to be on the lookout for the next deal.

Keeping Track Of Credit Card Interest Rates

With rate surfing, it is essential to move to the next card before the reduced interest period runs out. If you don’t, you could find yourself with hefty payments to make. If you’re surfing with many credit cards, you’ll need to keep track of the different offer expiry dates so you don’t get caught short. Keeping track of these dates can be as simple as writing them down on a piece of paper.

The more technically savvy may prefer to use a spreadsheet for this purpose. Whichever system you use, its worth using a calendar to keep track of the dates when you need to apply for new cards and move money. If you have an electronic calendar, set up automatic reminders for these dates. That means you will always know when it’s time to make the next credit card balance transfer.

Finding cards to move to is relatively easy, as there are several websites that offer comparisons of credit card deals. The same sites will also show you whether the 0% credit cards offer other incentives, such as air miles, vouchers, cash back or charitable contributions.

Balance Transfer Fees

One factor to think about is the rate charged for the balance transfer. With rate surfing becoming more popular, many credit card companies are charging a one-off balance transfer fee of approximately 2% of the sum transferred. This can soon add up when you are transferring large sums or working with several credit cards. There are still a few cards that do not charge this fee, so it’s worth shopping around to find one.

Organise Your Rate Surfing

Organisation is the key to successful rate surfing. For example, it may be worth automating your credit card payments by setting up a standing order through your bank. That way you can be sure that your credit card bill will always be paid on time, and there won’t be any danger of damaging your credit rating.

Rate surfing works best for those who intend to clear a debt. Adding more money to a transferred balance will not help with this goal. In addition, credit card companies may charge a different interest rate on new spending. This could increase, rather than decrease, the debt. With a bit of organization, most people can manage to reduce their levels of debt through rate surfing.