How to chose a credit card

The choice of a credit card depends on the borrower’s requirements, credit history, income level, and other factors. Credit card companies, banks, and other financial institutions offer different types of credit cards, including student credit cards, rewards credit cards, airmiles credit cards, cashback credit cards, and other types. The applicant’s credit score is an important factor which credit card companies take into account. Persons with a limited credit history or poor credit score may want to apply for a prepaid card or a secured credit card. Those with a high or very good credit score and high income may apply for rewards credit cards, cashback credit cards, and other specialty cards, offered with many beneficial features. Among these are hotel points for upgrades and complimentary nights, shopping discounts, concierge service, and many others. Cardholders enjoy other benefits as well, including emergency cash disbursement, stolen or lost card reporting, cardholder inquiry service, etc.

Students are offered student credit cards, and these are usually available to full-time students. Student credit cards go with lower interest rates than other cards. Persons who want to save on interest charges may want to look into low interest credit cards as well.

Obviously, credit cards are not the best solution in each case. For example, persons who plan to make big-ticket purchases may apply for a personal loan. Those who seek funds to purchase a vehicle usually apply for auto loans. Persons with excessive debt, on the other hand, may have limited access to standard loans, and they resort to bad credit loans and payday loans. Those who have multiple, high-interest debts and find it difficult to keep up with repayments often apply for consolidation loans. Generally, credit cards are a good choice for borrowers who charge everyday purchases, seek to meet their short-term cash needs, and pay the balance on time. Credit cards are not intended to be used as a long-term borrowing solution.

Safe Ways To Use Your Credit Card

Credit cards have many practical applications, apart from using them as light switch covers and golf putters. It is better to use a credit card rather than your debit card when shopping online, buying big-ticket items, booking travel, paying for fuel and hotel accommodation, and much more.

It is safer to charge items to a credit card when shopping online. Debit cards link to checking accounts directly and are more vulnerable to hijacking. Most credit card issuers offer cardholders voluntary policies that help reduce the liability to zero.

Using a credit card is safer when you buy big-ticket items such as furniture and household appliances. Canadian credit cards come with dispute rights in case something goes wrong with the purchase or merchandise. Another beneficial feature is the extended warranty which extends the merchant’s warranty. If you are to rent a car or buy electronics, some credit card issuers feature property insurance for these types of purchases. Carrying a balance should be avoided when buying big-ticket items. On the other hand, some cards offer additional benefits such as auto rental collision damage waver, common carrier travel accident insurance, lost luggage assistance, legal assistance, etc. With credit cards, cardholders can make emergency cash transfers and request emergency card replacement. In addition, low interest credit cards also go with identity protection and balance protection as well as purchase assurance, typically over a period of 90 days from the purchase date.

Using a credit rather than debit card is recommended if you are a new customer. If you will be buying an item which takes a couple of weeks to arrive, your credit card will offer better protection. Again, if the item does not arrive or has defects, you can take advantage of the dispute rights that come with the card. It should be noted that protection is extended over a specified period. Problems should be settled as soon as they occur.

Airmiles credit cards are recommended for use if you are booking a travel. When using a debit card, the hotel chain or travel agency will debit it immediately.

Finally, it is not a good idea to use your debit card for recurring payments because you lose track of the payments. You will face late payment fees if you don’t have enough money in your account. A low interest credit card should be used for recurring payments, especially by borrowers who carry a balance.