Friday, March 07, 2008

Avoid waste with credit cards

Why credit cards are essential, useful and beneficial in modern times

Carrying too much cash around is dangerous with so much robberies happening nowadays. You may also find yourself sometimes you want to buy something which cost more than what you have in your wallet or purse. Further, credit cards are often needed for online transactions. Add to that the incentives that credit card companies offer for you to use their credit cards, and you should begin to see why I think credit cards are essential, useful and beneficial in these modern times.

How to avoid waste when shopping for a credit card

There are many banks and other institutions offering credit cards, and each of them comes with different conditions. You should try to get a free for life credit card which does not charge you annual renewal fees. When I got mine, I was told that it is a free for life credit card. What they didn't tell me was that this "free for life" comes with conditions. In order for me to avoid monthly charges, I must use the credit card at least 3 times a month and/or spend more than a specified amount. Moral of my lesson is, if you have the time, do some comparison shopping before you apply for a credit card. Know exactly what you are getting into before you sign on that dotted line. It would be great if you can find a credit card that is interest free, but the nearest I can find that might approach what one call an interest free credit cards is the Tesco Personal Finance Bonus MasterCard/Visa card which when I checked it, says the "Balance Transfer Rate and Period" is 0% p.a. for 13 months (2.5% fee). This to me means when you transfer outstanding balances from other credit cards to Tesco Personal Finance Bonus MasterCard/Visa card, you need not pay any interest on it for 13 months. The card also has a loyalty scheme. One-twelfth of the annual interest is repaid to card each year, so this may be considered as "almost interest free".

However, it is best you check with them all that is mentioned above before you apply for the card, or even better, if you can find a really interest free credit card. However, I doubt that is really possible as often, if they give you something, they take back something else in return. So be alert and if you have the time, read the fine prints in the conditions normally appended to the application forms.