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[C1251]Credit Cards Sign Up

by Tom Norwich, Tom

A number of us own a credit card or two, while many of us own one from each major bank. Each card provides a different set of benefits, we say. Do we really need that many cards?

What makes you and I go through all the hassle of credit card application for so many cards? The convenience of having the extra cash when you need it? The little gifts you get to exchange for with the points you clocked with your purchases? The pack of discounts that accompanies each card? Or the display of social status when you flash a Platinum card?

Whichever your reason for having those plastic cards in your wallet, if they are causing you financial problems, it is time to face reality and bid (some of) your plastic foes farewell.

The Power of Convenience
For the masses who keep credit cards for convenience sake, you are playing with fire. Convenience means you conveniently sign away your savings and conveniently purchase big ticket items that you do not need. Yes, it is very convenient to have a credit card, especially when you are overseas and have run out of cash. But doing that makes you feel wealthier than you really are, and gives you a false sense of financial security. It's easy to plant your signature above the dotted lines, but paying for that signature is far from easy.

Points for Gifts
Credit card companies do have a way to make us sign, sign and sign. They bribe us with point incentives for making hefty purchases so we don't feel too guilty about it. But think about it, how many of us actually managed to exchange the points for something decent after a year of card flashing spree? We have so many cards that the points are spread so thin, they either expire after some time (since it's too little to exchange for anything from the catalogue), or you reluctantly use up all your points to exchange for some dining vouchers that you might not use or eventually forget. If you managed to exchange for some decent products, you are probably spending too much?

Seductive Discounts
Since points can only be materialised into products (regardless of quality) after purchases, credit companies came up with discounts that you get to enjoy while using the card - 10% off your dining bill, 5% off your petrol, 1% rebate and the list goes on. Personally, I do find discounts more attractive than point incentives, especially if the restaurants that I frequent are in the list. I'm sold. But many times, we find that we tend to visit more of these restaurants every month now that wow, we have a discount card! And we end up spending more than we should!

Platinum Status
So, does flashing a platinum card make you look more prosperous or poor? Yes, it would have shown that you are earning a significant sum to be able to own that card. And yes, well, you are also telling the world that you now need more credit from the banks. Credit cards are literally instantly approved loans from the bank, yet you are feeling proud of yourself for having borrowed a greater amount than your companion. An irony?

Unlock the Secret
Then, are we supposed to cut up all our credit cards and fall back to cold hard cash? The answer is a simple No. Though misuse of credit cards may land you in financial troubles or even bankruptcy, they do come with benefits too. For example, you could actually save a few dollars with the discount schemes provided or pay for your meals when you are cash strapped in a foreign land. The secret is for you to amplify the advantages of the card and mute the disadvantages.

So how do you do that?

The 3 Golden Rules
1. Never swipe out of convenience. Always ask yourself if you really need the item. Or are you simply buying on impulse? Personally, I wouldn't buy the item on my first visit, especially big ticket items. I would wait for a week or so and see if I still want that item. Most of the time, I simply forgot about it or simply too lazy to travel back to that same shop to make the purchase. It works for me all the time. Try it out.

2. Make full use of the discounts, but never buy something just because you have a discount. Only use the discount when you need to buy something, not the other way round.

3. Try to keep to one or two credit cards at most. It is simpler to track your spending, plus you consolidate all your points into just two cards (so you get to exchange for that decent looking vacuum cleaner) and you would not forget to pay your credit card bills and end up with hefty fines and interests.

Credit cards are only plastic cards with a magnetic strip at the back. They do not have the power to drive you to debts. You are the one who approved of all your debts by frivolously leaving your signature on clusters of paper. Think about your financial status before you sign anything from now on!

When your next credit card bill arrives, make sure it doesn't make you sigh.. If it does, make sure you are heaving a sigh of relief, not remorse.

Every college student can tell you that they have seen several offers for student credit cards on campus. These credit card offers are everywhere. They come in bags at the student book store, in the student newspaper, and of course, online. But a student credit card is usually hiding some traps for the unsuspecting college student. If you are thinking about college student credit cards, consider these factors before you sign up.

Pre-Approval

Most college student credit cards lure young people in with the promise that they are pre-approved for the card. This pre-approval process normally involves checking your credit and deciding based on a number of factors that you would be a good candidate for credit. If you have established good credit, the pre-approval process confirms that you are able and willing to pay back your debt on time and in full.

However, most college students do not have any credit. So the pre-approval process simply involves confirming that you are a student. This should make you suspicious. What it means is that the company is willing to gamble that you won't pay back the debt, providing them with added interest that could be in the hundreds or thousands of dollars.

Interest Rate

This leads us to the issue of an interest rate. For most student credit cards, the interest rate is enormously high. This is due to the fact that they are taking a gamble on whether or not you can pay them back. However, in order to lure you into signing up, they may offer an interest free period.

This interest free period also comes with some traps. If you miss a payment or are late once or twice with your minimum payment, you could be subject to the delinquency rate, which is as high as thirty percent in some cases.

Minimum Payment

Most people will look at a student credit card and think it will be easy to handle because of the low minimum payment due each month. But if you only pay this minimum payment each time, you will end up with an enormous amount of interest due. Think about it this way: If you owe one hundred dollars and the minimum payment due is fifteen dollars, you will rack up interest in the remaining eighty-five dollars. If your interest is twenty percent, that's seventeen dollars added to your next bill. The interest you accumulate is more than you are paying. So your bill will actually get higher the longer you pay rather than lower. Always pay more than the minimum payment.

Good Credit

The benefit to college student credit cards is that you can build up some good credit history with a good payment record over time. So always pay your bill on time and in full if possible. If you can't pay your student credit card off in full each month, try to at least double the minimum payment. Student credit cards can be your learning tool for a future of responsible financial management.

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Both Tom Norwich & Robert Alan 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 Norwich has sinced written about articles on various topics from Credit Cards, Arts and Site promotion. By: Violet Wee @ Online Wealth Advisor on making money and everything to do with wealth building visit our website. Tom Norwich's top article generates over 1300 views. to your Favourites.

Robert Alan has sinced written about articles on various topics from Credit Cards, Business Credit Cards and Credit Cards. For more information on , Robert Alan recommends that you visit CreditCardAssist.com. Robert Alan's top article generates over 110000 views. to your Favourites.