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[C1241]Credit Cards And Personal

by Tom Tessin, Tom

A common question among the avid traveler is “Will a credit card actually benefit me when I travel a lot?” I can sum this all up in one word and it's “yes” but you have to have the right card and you need to use it properly before you can actually take advantage of it. Before you just start swiping any credit card out there, there are some things you should know about your card before you use it.

You need the right card – Before you start swiping that card, make sure that you have a “travel based credit card”. If you don't have a card that's travel based, you're probably not getting the rewards you deserve. Sure, there are cash back cards out there that will give you 1-2% back on everything but there are travel cards out there that will give you 5% back. If you want to maximize your rewards on travel, look into this niche based card. Other than that, sure you may save but how much will you save?

Use it properly – if you don't use your card the right way, you're not going to take advantage of the rewards and let me explain. Let's say your interest rate is 13% and you have a $500 balance. Let's say you only pay off $250 for that month. Now, you're going to have that APR tacked onto that leftover $250. In the long haul, you're going to pay more toward that interest rate than you would the rewards. It's important that you pay your card off in full each month and never miss a payment. This way, you won't have to worry about any fees at all.

Watch your rewards – This one goes alongside with picking out the right card. If you're getting a card where you only get 5 times the points on airline A and you fly airline B all the time, I think you picked out the wrong card. You're going to want to pick out the card where you can maximize on airline B. This is why it's important to be loyal to an airline. When you find yourself loyal to an airline, you're going to get more rewards and some high perks like boarding early, getting gifts or even getting upgrades on your next flight. Airlines love it when people continue to fly their airlines only.

It's not hard to pick out the right card. Usually when someone asks me about a travel card, I will tell them to look for an airline that offers a card that they fly through. While I think it's important to be loyal to an airline, I can understand why some people want to find a cheap flight and they don't care about loyalty. What they don't understand is that in the long run, the gifts and rewards might outbalance the savings that they have occurred just by going the cheap route. The next time you fly, try out a card. If you like it, keep using it, if not, just shred and cancel, it's that easy!

Some companies promise to get you a credit card no matter how bad your credit is.
Here's what can happen if you pay them the $200 or more they usually ask for:

You receive a credit card that's only good for over-priced merchandise from their catalog.

You get applications for secured credit cards. A secured credit card offer requires you to deposit $500 in a bank account to receive a credit card with a $500 limit.

You receive nothing at all.

Secured credit cards from a legitimate bank or credit union can help you re-establish credit. Many banks and credit unions will give you a secured credit card with no upfront fees or charges. If you want one of these, go to your own bank or credit union and apply for one.

Other scams involve credit cards with a low credit limit of $300 or so. The bank making the offer charges you an application fee, a processing fee, annual fees, a rush approval fee, and a high interest rate that starts the day you open the account. These charges may eat up as much as 90% of your credit line! Remember, if you want a secured credit card, go to your own bank or credit union and don't pay excessive fees.

Instant Loan Checks?.. There is no "free" money

Instant loan checks often come to you in the mail. They look like a bank check but are really a loan. The letter that comes with the check tells you that all you have to do is sign the check and cash it. When you sign the back of one of these checks and cash it, you are actually signing for a loan and agreeing to make payments on the loan with interest. To find the interest rate, monthly payments and other costs, you must carefully read the letter and the other papers sent to you with the check.

Consumers often mistake these checks for benefits or reimbursements. After they cash the check, they find themselves with a high-interest loan they didn't want, didn't need, and couldn't afford. The rate of interest charged by the lender is often higher than what is stated in the cover letter. If you can't make the payments, the lender may ask you to take out a new loan and secure it with your home.

Before signing and cashing a check, be sure you know the following:

Who sent the check and why?

Read the letter that comes with the check. Be sure you understand what you're committing to by signing and cashing the check.

If you don't understand the terms, call the sender and ask questions.

Destroy checks that you don't intend to use it so no one else can cash them.

Credit Repair Companies

Credit repair companies promise to improve your credit. They may also promise to get you a loan or a credit card. They lead you to believe they have special ways to get negative information off your credit report. They don't.

Credit repair companies have no special powers to improve your credit. There is nothing they can do for you that you cannot do yourself. Paying them leaves you less money to pay your current bills and past debts.

Because of the problems with credit repair companies, strict laws were passed to regulate their activities. For example, they must provide a written contract that you can cancel within five days. They can't require payment in advance, and all promised services must be completed in 90 days. They must also register with the Department of Justice and file a $100,000 bond with the Secretary of State. Be aware that very few credit repair companies follow the law.

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Both Tom Tessin & Lar 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.

Tom Tessin has sinced written about articles on various topics from Mileage and Fuel, Education and Finances. Find great articles like this and more of Tom's work all on his .. Tom Tessin's top article generates over 673000 views. to your Favourites.

Lar has sinced written about articles on various topics from Travel and Leisure, Credit Cards and Hotels and Hostels. You can find the best selection of and student credit cards at