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Credit Cards

Debt

Apply For Credit When You Do Not Need It

When it comes to using credit, it is really important to always be thinking ahead.  Remember, when you need credit you won’t likely be able to get it, so when you are working full time and things seem to be going your way financially, this is the ideal time to be applying for credit.

Take Joe for example.  He is a 30 -year -old full time truck driver.  He is earning $60,000 per year and life is good.  He never bothers to apply for a credit card or a credit line because he is able to comfortably live off of his income.  Then, tragedy strikes and he gets laid off from work.  He soon depletes all of his excess cash flow and suddenly finds himself strapped for cash.

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Credit Cards

Credit Card Fees You Need To Be Aware Of

Earn Spend Save: The Savvy Guide To A Richer, Smarter, Debt-Free Life by Kira Vermond

While reading through Earn Spend Save, I came across some great tips on what to watch out for when it comes to credit card fees.  The author emphasizes the importance of understanding what fees you are being charged on your credit card, and she encourages people to be really careful when selecting the right credit card for them.

The fees you to need to be aware of include annual fees, cash advance fees, convenience checks, over-the-limit fees, inactivity fees, and foreign currency conversion fees.

Annual Fees

If you are currently paying an annual fee on your credit card, you may want to consider converting your card to one that is free instead.  However, some cards with fees do have significant perks so make sure it is in your best interest before cancelling your current card.  Right now my husband and I do have a card that we pay for annually as we feel that it’s worth it due to the rewards points we can redeem towards airfare overseas.  However, there are many free rewards cards available these days so it pays to do your research.

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Credit Cards

Student Credit Cards – Are They Important?

Students are often neglected with regards to getting any credit benefits from various lending or credit sources who are otherwise ready to offer credit to businessmen and other working professionals. But the students of today are the next generation and are our future. So its important to encourage and support them with the best available financial and credit opportunities so they can grow in their own fields and provide the best output for our country.

As such, student credit cards provide one mechanism for young people to establish credit as well as provide a financial back stop for education and living expenses while attending school. The cost of living today continues to rise, and the amount of money needed to finance an education, particularly secondary education and college education, is outpacing the rate of inflation by a considerable amount. Many parents cannot bear the entire financial burden of the academic costs for their children. Student credit cards provided by a variety of different banks, lending institutions and credit card companies provide significant opportunities for students to establish and build a credit history at an early age. Provided, of course, that the credit card is used with care and caution.

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Credit Cards

Is It Better To Use Cash Or A Credit Card?

is it better to use cash or credit card to make purchases?Cash or Credit Card?  The decision is really up to you.  I’ve outlined just a few of the pros and cons of using cash versus a credit card to shop.  I personally prefer to use a credit card, but I wouldn’t recommend using a credit card unless you know you can pay off the balance every month.

Pros to Using Cash:

*Both methods are not subject to per-transaction fees, however some companies reward customers for using cash by giving them a discount or benefit as it costs the company less to process a cash transaction than a credit card transaction.

*If the networks are down or if the power has gone out, stores can still process cash transactions.

*Carrying cash is also handy for those rare stores/restaurants that don’t accept credit or debit transactions.

*Some people become more conscious about how much they are spending when they use cash.  If using cash makes you more frugal, then that’s definitely something to take into account.

Cons to Using Cash:

*Money is quite dirty.  It’s been touched by a multitude of hands.  You want to make sure you wash your hands after handling money.

*Money can get really heavy if you end up with a lot of change.

*Cash transactions generally take more time to process than credit card transactions.

*With the exception of a few stores that give benefits to those using cash, there generally isn’t any incentive to make cash transactions (i.e. no rewards points).

Pros to Using Credit Cards:

*Transactions are usually processed quickly and credit cards are accepted almost everywhere.

*You don’t have to pay for your transactions until the due date, so it can buy you some time to get the funds if you don’t already have the funds available.

*You can earn benefits/rewards for using your credit card.

*Many credit cards also have insurances and other discounts and benefits attached to them that you could take advantage of,

Cons to Using Credit Cards:

* You pay a significant amount of interest if you don’t pay off your balance each month.  Most credit cards charge 19% interest or higher.

* It creates an extra bill for you to pay each month.

* For some people, using a credit card causes them to spend more money than if they use cash to make purchases.

It’s really up to you whether you choose to use cash or credit to make purchases.  You know your spending habits better than anyone else, so you need to decide for yourself what works for you.  Neither one is really any better than the other, but if one method helps you to be more disciplined when it comes to spending and saving money, then by all means, use that method.

Credit Cards

The Day I Lost My Credit Card

I had a bit of a scare recently when my husband and I went camping.  When I went to pull out my credit card to pay for our campsite, my card was missing.  Things like this never happen to me!  I am generally an extremely organized person.  But, sure enough, it can even happen to organized people.

I frantically thought of all the places I’d last shopped using my credit card.  Because we were camping I was limited to using my cell phone.  Oh, and of course I had forgotten to charge the batteries before we left so my battery was dead after one phone call.  (Guess I’m not that organized, after all!)

Fortunately there was a pay phone nearby and I was able to remember the last place I had used the card.  I spoke to an employee who confirmed they had kept my card for me.  Talk about relief!  I was so glad I didn’t have to go through the process of canceling my card.

Unfortunately not everyone has the happy ending that I had after losing a credit card.  If the wrong person finds your card, they can spend a lot of money and cause a lot of hassle.  In the event that this happens to you, here are a few things that you can do:

1.  Contact your credit card company immediately and inform them of the fraudulent charges.  They will close your card to prevent any further charges.  I would recommend closing your card even if you don’t see any fraudulent charges after you have made an attempt to find your card and have called the places where you recently shopped.

2.  The next step is to follow company procedures and fill out any applicable paperwork to ensure that you will not be liable for the charges.  Be prepared to wait a while for the investigation to take place.

3.  Even if you haven’t lost your card, but you notice an unusual charge on your statement or online banking, I would recommend that you follow it up.  Even if the charge is small, it is still worth the time it takes to investigate it as whoever has your credit card number may decide to charge a larger amount next time.

4.  For information on how to protect yourself from credit card fraud and other general information regarding credit cards, click here.