If you are like most people, you have received plenty of credit card offers in the mail. No doubt you have also seen them advertised on the television, in newspapers and in magazines. You can't get away from them! However, finding the right credit card to suit your needs should not be your only consideration. Using your credit card responsibly is even more important.
High Street stores are always too willing to give you some sort of discount the day you sign up for a card, and lets face it, the extra 10% discount is usually very tempting. After this discount, you find yourself stuck with another monthly credit card bill.
The biggest problem with credit cards today is that people believe that they aren't really spending money. There isn't anything missing from our wallets or purses, so it becomes very easy to pull out the card whenever and wherever we need it.
Credit cards were not made with budgeting in mind, because each month, there is a payment that has to be paid, and even though being able to meet the minimum payment does not bring about any sort of late payment fees, just look at the balance, it is more or less standing still!
Ask yourself how long it would take you to completely get rid of the debt if you did not charge another cent to the account. Never consider getting another card to transfer the balance to unless it is one offering interest free credit for the amount of time it will take you to pay off the debt.
To avoid the worst problems of credit card usage, don't have too many of them. One, or at the most two, of them is enough to meet most needs, and the major credit cards are accepted globally so you don't need to apply for new credit cards when you travel overseas. Having too many credit cards can become an organizational nightmare; too many due dates can leave bills forgotten, late and receiving costly late payment penalties.
Another credit card temptation that can get you in a lot of trouble is the ability to borrow cash on your card. This is known as a cash advance and it enables you to withdraw cash from your card via an ATM. However, this form of borrowing is usually charged at high interest, calculated daily, and is ultimately a very expensive way to borrow. It can be too easy to create a level of debt that is too high for you to service. If you are going through a difficult time, withdrawing money from your credit card can seem a godsend. Unfortunately, your debt can climb dramatically over the course of a few months and with exorbitant interest rates you can find yourself in real trouble. It is also a good idea to stick to a low cost, no frills credit card that offers low interest and no annual fee.
If you are one to use an ATM regularly, you will find that your debt will build up and soar over a small time of just a few months. Interest can go as high as 24%, so avoid this. It makes much more sense to avoid temptations such as rewards and bonuses. Try to opt for a credit card with no frills, no annual fee, and a low interest rate.
When trying to establish a good credit history, you can do so by using a credit card correctly. Your payments have to be on time. It is important that your credit rating stays healthy, especially in the case that you need to buy something big, like a car. During these times, you will be rewarded for having good credit history. As much as some of us love them, shopping sprees aren't needed. Neither are cash advances and late payments. These all go into your credit rating, so if you are looking to use your credit card to build up good credit, only spend what you know you can afford to pay back each month.
Buying a cruise ticket or a plane ticket isn't like making another purchase. If you buy groceries or shoes, you can pay the bill completely and walk away with your purchase in hand. You put down a deposit if you buy a car or a house. You don't pay the entire amount until you move or you drive away.
Credit cards work differently when you travel, however. If you need to make a reservation for a flight or a cruise, you pay in full and well in advance. If the carrier goes out of business before you travel, you may find yourself with little recourse against the carrier. You may not have any rights to try to collect your money.
Many travel professionals will warn their clients that there are few guarantees of getting clients what they want, where you want to go, and how you are going to get there. There are five steps that travelers can take to try to get their money back if the carrier goes out of business.
Step 1: Know Your Rights You don't have many rights when it comes to dealing with the airlines and cruise lines. You are at the carrier's mercy if your flight or cruise is delayed, canceled, or rerouted.
You may qualify for "denied-boarding compensation? if you are bumped from a flight. This means you may be eligible for a nominal cash payment, which is limited to $200 for domestic flights. You don't necessarily qualify for any money if your carrier goes out of business.
Step 2: Charge It Using a credit card can give you a federally guaranteed insurance policy if your carrier goes out of business. Additionally, using a credit card might be your only way to seek reimbursement.
The Fair Credit Billing Act gives people a way to appeal a charge that they made for a product that was never received. You can file for a refund if you paid for a trip on a credit card and the carrier went out of business. This appeal is only active for 60 days after you make the charge.
It's very risk to pay in advance with a check or cash. The Fair Credit Billing Act does not cover cash or checks and your options for getting your money back after the carrier goes out of business are much more limited.
Step 3: Wait If It's Possible Travelers usually receive encouragement to make their reservations early. For those who want to take a long trip or travel during peak seasons, booking in advance is the only way to get the dates and prices they want.
The problem with booking so far in advance is that, as we've mentioned before, the Fair Credit Billing Act has a short time period. You will need to file a written complaint within 60 days after you paid for the travel if your carrier goes out of business before you travel. If the ticket was paid for months ago and you've already paid the bill, you can't use the protections offered in the Fair Credit Billing Act.
Step 4: Compare the Carriers Available to You Airlines in the United States can establish their own policies about delays and cancellations. You can find each policy in the airline's "contract of carriage"; this is the contract between passengers and the airlines, and is available on each airline's contract. Some travelers carry a copy of the contract when they fly. This can enable them to become "experts" on the airline's obligations if there is a problem.
Cruise lines and similar carriers have similar contracts.
Step 5: Consider Paying for Travel Insurance A travel insurance policy can help you recover money that you've lost on a trip that was canceled when the carrier went out of business. Be careful to get a good policy, however, and not one that will only give you additional expenses and problems.
The best and most affordable coverage usually comes from independent travel insurers. Consumers who buy policies from the carrier may think they are covered when they actually weren't.
Travel insurance policies also can cover a range of problems. Those problems include medical emergencies, bankruptcies on the part of the carrier, and terrorist attacks. You should pay close attention to the coverage you buy. You should make sure that you read the fine print for any insurance policy that you buy. Here are some tips for evaluating your insurance even when buying with a rewards card:
* Compare the different policies and insurers available to you. You may want to look at websites that include insuremytrip.com and quotewright.com.
* Buy your policy through an independent insurer and not the carrier.
* Act quickly. You must buy many types of policies within weeks or even days of buying your tickets.
* Think about buying trip cancellation insurance if you are buying or putting a deposit for a trip many months in advance. This is especially true if your ticket is non-refundable. Doing this will give you coverage even after the 60 day limitation under the Fair Credit Billing Act has passed.
* Make sure that your carrier is covered by your insurance policy. Some policies limit the carriers they will cover. Also make sure that your policy covers "financial default? on the part of the carrier.
Both Nicholas Makaryk & Landon Mcgehee are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Nicholas Makaryk has sinced written about articles on various topics from Credit Cards. Nick Makaryk is an Internet Publisher, Copywriter, and Founder of . A Free consumer credit card comparison site helps individuals find the. Nicholas Makaryk's top article generates over 2900 views. to your Favourites.
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