If you want to choose a credit card because you love to shop, you need to be cautious about it.
Credit cards can be dangerous if you are not disciplined. Sometimes, these cards make you feel like you have an unlimited supply of cash.
Even if your next pay check is a few days away, you rarely worry about running out of money as you can always charge it on your credit card and pay it off when the bill arrives.
There is nothing wrong about your love to shop or using your credit card to pay for purchases. However, you must ensure you will practice self-control and discipline when it comes to paying off what you owe.
It is important to choose a credit card that suits your spending lifestyle. Credit card issuers often times provide cardholders with incentives to encourage them to spend using their cards.
Credit card characteristics to compliment shoppers
You must ensure you will benefit from the incentives that credit card companies provide, so you can maximise the use of your card. Obviously, you need to consider the card’s interest rate but don’t focus only on this. These interest rates change over time. While the other characteristics can also change, it is usually not as frequent as interest rates.
What you should look for in your primary card
• Rewards programme
Most credit cards have a rewards programme. This is how credit card companies attract new clients. Since you love to shop, you need to pay close attention to the rewards programme your card offers. You want to get something back from all the shopping you will do on your card.
• Protection and insurance
Some cards allow you to extend the warranty of items purchased – especially if it is an expensive item. There are also cards that offer protection in case of theft or product damage. This will help you make secure purchases.
• Customer service
Sometimes people forget to research about the customer service behind every credit card company. When it comes to returns and refunds, you want to make sure you will not have a hard time getting assistance from the card issuer.
Even if the rewards are great, try to consider the customer service reputation of the credit card company. If you encounter problems with your card or purchases, it will be doubly frustrating if the customer service is below par.
• Annual fees, charges
Finally, you must be aware of the annual fees and different charges you will encounter as you repeatedly use your card. There might be a way around these charges but you will have to find out what these are.
Also, it is important that you look out for credit cards with better terms. You might be able to enjoy your purchases better with another card. As mentioned, do not concentrate on the low-interest rate alone because this can change. Look at the other fees that will be expected of you as well.
How to use your card wisely while shopping
There is nothing wrong about shopping – we cannot help it because we live in a consumerist society. However, that does not mean we cannot be smart about it.
Besides understanding your card’s rewards programme, here are other tips to help you make smarter decisions.
• Buy based on necessities and not on the ‘sale’ price or rewards
Try to scrutinise the reason why you are buying. If you are buying because the item is a necessity, then, by all means, make the purchase.
However, if you are only buying because the product is on sale or to get a reward, then think twice before you proceed.
• Educate yourself
Knowledge is your best defence against making a mistake. Educate yourself whenever possible so it can influence your buying decisions.
Credit card issuers send notifications – make sure you pay attention to those. If the company intends to raise their rates, make sure you hold back on your purchases.
It is important to understand the factors that can raise your interest rate or your monthly payments.
• Know the billing cycle of your credit card
Finally, you have to understand the billing cycle of your card. When you pay within the grace period of the billing cycle, you do not have to worry about finance charges.
It is also important to check the billing itself – so you can see if there are any unauthorised transactions. You should report these immediately.
When you choose a credit card, it is important that it complements your spending preferences. That is how you can maximise the rewards that you will get out of it.
This article first appeared in thenewsavvy.com
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