How a Credit Card Can Be Your Friend

We have all heard countless stories of people over their heads with credit card debt-maxing out every card they own, then only being able to afford the minimum monthly payment. High interest payments shackle people to their debt for years, not to mention the significant income drain the finance charges have on their families.

It is unfortunate that many Americans must live with this reality, since with some financial discipline, this delimma is avoidable. When a spending plan is developed and followed, a credit card becomes no more dangerous than any other form of payment.

When credit card bills are paid in full each month, credit card fees and finance charges do not accumulate. With a little extra bookkeeping from a spending plan, a credit card is transformed from being a burden to a very rewarding financial partner-since it provides the following advantages over other forms of payment:

· Rewards Programs.

Many credit card companies offer loyalty programs to reward those customers who use their cards more. Rewards usually come in the form of points or cash. Depending on the company, the points can be redeemed for things like restaurant gift certificates, hotel stays, airfare, vacation packages and more. Cash cards typically pay a 1% rebate on your purchases, which makes for an extra $180 a year on monthly spending of $1,500. This level of spending is easily achieved by putting all your purchases on a credit card (including utility bill payments). There are even cards that pay more than 1% for particular types of purchases like groceries or gas, such as Citi's Dividend Platinum Select card.

· Perpetual 0% Loan.

When you use a credit card, you are using the bank's money to pay the store instead of yours-for free. While you're waiting for your statement to arrive, your money can continue to work for you in an interest- bearing account, such as ING Direct's Orange Savings. Unlike a debit card that continually reduces your account balance, using a credit card preserves your entire bank account balance for earning interest until your statement's due date. That's an extra $35.25 a year based on a $1,500 balance at today's rate of 2.35%*.

· Fraud Protection.

If your credit card number is used fraudulently, by law your maximum liability is $50. This is not true of a debit card. A perpetrator can easily use your debit card as "credit" transaction in retail stores or online. This type of transaction does not require a PIN number to be entered, and is especially dangerous since a thief can clean out your entire bank account in short order.

· Loss Protection.

Unlike cash which is gone for good if lost, a credit card can be replaced within days of reporting it to the issuing bank. In the meantime, you're protected against unauthorized use by anyone who finds the lost card.

· Warranty Coverage.

Many MasterCard credit cards warrant your purchases above and beyond that offered by the product's manufacturer. Your purchases made with one of these cards get an extra level of protection for free. See MasterCard's website (http://www.mastercard.com) for the full scoop on their coverage terms.

· Purchase Protection.

Another benefit MasterCard offers on most of their cards. With their Purchase Assurance plan, your purchases are automatically insured against damage or theft for the first 90 days, also at no additional cost to you.

With all of these benefits over other forms of payment, credit cards can easily become your favorite way to pay. Instead of dreading your credit card bill each month, it can become a pleasant reminder of your money mastery.

Copyright 2005, Jim Hood

Jim Hood is senior contributing editor at the Discount Shopping Service Guide. He frequently writes credit card offer reviews and articles on money-saving strategies for shopping online.

* Rate quoted from ING Direct on January 4, 2005.

---

Credit Card Debt: One Way To Avoid It

One of the biggest problems people have in these modern... Read More

Credit Reports: Find out why you have been refused Credit.

You may already have 2 or more credit cards in... Read More

The Three Largest Factors In Your Interest Rate

There are three major factors that affect how much you... Read More

Credit Card Shocker

Have you ever looked at your credit card statement? I'm... Read More

Applying for Credit Cards Online

In the olden days, about 10 years ago, before the... Read More

Comprehending a Credit Report

Obtaining a credit report is an excellent way to begin... Read More

Harassment of People in Debt by Creditors

HarassmentHarassment of people in debt by creditors or their agents... Read More

Useful Tips On Avoiding Credit and Charge Card Fraud

Credit and charge card fraud costs cardholders and issuers hundreds... Read More

How To Start A Second SEPERATE Credit File!

Your personal credit file is separated from those with the... Read More

Building Your Credit History

Today, credit is an indispensable part of our lives. In... Read More

Dont Dig Your Own Pit

If you want to enjoy your life out of spending,... Read More

Choosing the Best Low Interest Credit Card

With so many low interest credit cards on offer, how... Read More

What Does Your Credit Score Tell You?

When you apply for a loan or a mortgage, the... Read More

My Student Credit Card Adventure

And some practical advice too!My first credit card?I remember my... Read More

7 Consumer Credit Laws You Should Know if You are Trying to Repair Your Credit

There are seven consumer credit laws you should be aware... Read More

Choosing A New Credit Card

1. Choosing A new credit cardThere are many reasons for... Read More

How To Eliminate Credit Card Debt

There is almost nothing more troublesome than having too much... Read More

Beware of Falling Minimum Payments

If you opened a credit card statement recently and were... Read More

Credit Worthiness

Credit Worthiness is an important business and personal asset each... Read More

Low Interest Credit Cards Have Many Advantages

When credit cards are used wisely they can be very... Read More

What Can Happen to You as a Victim of Identity Theft, Facts & Figure

Is identity theft really that serious? Thousands of people every... Read More

Bad Credit Loans For Those Who Seek Alternatives for New or Old Car

You can still save money on a Bad Credit Loan... Read More

What You Need To Know About Credit Cards

What is a credit card? A credit card is... Read More

Learn The Truth About Identity Theft

Identity theft is the fastest growing crime in America, according... Read More

Beat Credit Card Companies at Their Own Game!

Have you ever wondered how much money a credit card... Read More

Credit Card Entrapment - The Secrets are Out

Have you ever wondered why your credit card bill is... Read More

Credit Repair Kit Sound To Good To Be True? It Is.

A lot of people have bad credit. It is unfortunate... Read More

Negotiating Rates with Your Credit Card Company

Ok, let's face it, everybody hates high credit card rates,... Read More

Are you paying higher interest on your credit cards than you think?

Many credit card holders sign up for a credit account... Read More

3 Ways to Improve Your Credit Score by 50 Points In Less Than 30 Days

In Less Than 30 Days. "What can you do to... Read More

Credit Help For Renters And Others On The Horizon

Sue is a homeowner and pays her mortgage and other... Read More

Debit Card vs. Credit Card, What Are The Differences ?

Ah, the "good old days". If you are a baby... Read More

How To Avoid Becoming A Victim of Identity Theft

With identity theft statistics currently at an all time high,... Read More