Did you know that there are many credit card benefits that should convince you not to eliminate this purchasing tool from your life?
In truth, our problems with this type of debt is not because of the credit card itself. Although the whole purpose of being in debt seems appalling, the real problem lies in how we choose to use it. When we decided to abuse the use of these credit cards, that is when our road towards financial ruin started. When we ignored the proper use of these cards, that led to the accumulation of our debt. That is the real mistake that got us into so much credit card debt.
The solution to your credit card problem does not lie with the elimination of these cards. Not only did you fail in solving the root cause, you will not be able to enjoy the various credit card benefits that we will discuss in this article.
Various benefits of your credit card you may not know
So what are the benefits of using credit cards for your purchases? We have a couple here that you may want to look for when you are searching of a new credit account.
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Protection from fraud. Most credit cards offer fraud protection that will keep you from being held responsible for paying any unauthorized charges. Identity theft is an increasing problem today. According to data compiled in the StatisticBrain.com, 64% happen through the misuse of an existing credit card account. If your card is stolen, the thief will try to buy products using it. When you immediately report your stolen card, your account will be flagged as such and merchants will be alerted. Anyone using your card, including yourself, will be asked for additional identification. When you lose cash or even a debit card, that is as good as gone.
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Rewards. A lot of credit card companies offer rewards for consumers to enjoy. This is actually one of the most popular credit card benefits that you can get. This is the reason why you should choose a card that compliments your lifestyle. If you love to watch movies or concerts, there are cards that allow you to get regular entertainment freebies. If not freebies, you can get it at a very good discount. If you love to travel, there are also discounts and other perks that you can enjoy thanks to your card. These can include free upgrades, free travel insurances and other rewards.
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Protection from varying prices of the same product. When you bought something using your card and you found out that another store sells the same item at a lower price, your creditor can refund the price difference. Of course, there are details involved like a time frame between the actual purchase and the report of a lower price.
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Replacement for items bought. In case the item you purchased is stolen or damaged, some credit cards can have that replaced. As long as it is within the timeframe stated under the terms and conditions, you can be assured of getting your money’s worth for a transaction made with your card.
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Longer refund period. In case you bought something that you no longer want, you may want to check if your creditor can give you a refund for it. This is great when the merchant refuses to accept the product you want to return because it is already past the return period. There are credit cards that allow up to 30 to 60 days of refund period.
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Free concierge service. Did you know that you can call a toll free number and ask them to do things for you? Things like reservations, deliveries and even travel arrangements. You may want to check if your creditor offers these services.
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Card replacement. Imagine if you are travelling and you suddenly lost your card and you have no cash with you. Some credit card companies offer to provide you with a replacement card or even emergency cash within the first 24 hours since you reported the loss. This can prove to be very handy when you are far away from home.
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Chargeback. This is a great feature offered by most credit card companies. In case you bought something online and it turned out to be something that you do not like, you can request for a chargeback. What will happen is your creditor will contact the merchant. If things go well, you can get your money back without any hassle.
All of these credit card benefits can really keep you from a lot of headaches in the future. It can prove to be useful when things do not turn out as you planned with your purchase transaction. Not only that, it can mean savings for things that you never thought you would need.
How to avoid the pitfalls that will lead you to credit card debt
Of course, all of these credit card benefits will be for nothing if you do not learn how to keep yourself from credit card debt. Make sure that you know how to use your credit card wisely.
Credit card debt is still one of the debts that plague the average American household. Cardhub.com shows that Q3 in 2013 showed a decline in credit card debt growth. Q2 of 2013 showed an additional $9.6 billion worth of debt. In Q3, the debt added is only $5.4 billion. The site pointed at the positive employment conditions of the country to help make this growth smaller than the last quarter. But despite this, the total debt amount is still relatively high. You need to make sure that will not accumulate into an amount that you can no longer pay back.
To help you, here are some tips.
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Budget your credit card purchases. One of the obvious credit card benefits is the seemingly unlimited amount of money that you can use. While that is true, you need to remember that you are using your creditor’s money. You need to pay that back and if you cannot do it during the next due date, you will add finance charges to your balance. Include your credit card purchases in your budget so you know your limitations.
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Pay your dues in full when the bill arrives. This is the only way that you can avoid incurring the dreaded finance charges on your debt. It will not grow unnecessarily and you will only pay for what you purchased. That is the best way to pay off credit card debt.
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Request for a lower interest rate. Some people are unaware that they can do this. Creditors have the right to increase your interest rate but they are mandated to inform you beforehand. What they do not tell you is you can request that they do not include you in the increase. Or even if they are not going to increase your rate, you can call them up to state your request. One of three things can happen. One is they will convince you to accept the new rate. The other is they will agree to lower your rate or keep it from increasing. The third is you will both agree to close your credit card account with them and you will discuss a payment plan for your remaining balance.
These are only a few of the things that you need to remember when you are using your credit card. Remember that your account may have a lot of credit card benefits but they will be for nothing if you fail to keep a tight lid on your spending.