If you’re looking to get a new credit card, you may make the mistake of thinking that all credit cards alike. As a result of this thinking, you never fully understand the variety of options available to you.
Once upon a time, yes, credit cards were basically one-size-fits-all. It didn’t matter the bank you chose, the purpose was simple – buy now, pay later. However, credit cards are much more than a backup payment method and a tool for establishing a credit history.
Not that you can’t enjoy the simplicity of credit cards, as there are still plenty of no frills credit cards that offer just the basics. But if you’re a frequent credit card user and someone who pays his balance in full every month, are you taking full advantage of the services and perks available to you?
It isn’t enough to simply use your credit card, you need to make sure that your credit card is working for you and saving you money.
1. Interest rate/APR
To avoid new interest charges, you need to pay your credit card bill in full within the grace period. Of course, this isn’t always an option, and sometimes, you may need to carry a balance. Not the worst thing in the world, but if you don’t want to get slam with high interest fees, you need a card with a low rate.
Pull out your credit card statements and check your rates. If you’re paying over 14% or 15%, ask your creditor to reduce your rate, or start shopping for a low-rate card and transfer your balance.
2. Rewards programs
You’re a loyal customer, why not enjoy a few rewards? If you use your credit card regularly, choosing a card with a rewards program can actually save you money. These programs are a no-brainer. Simply use your card for everyday purchases. Earn one point or mile per every $1 you spend, and then redeem your reward points or miles for gift cards, merchandise, airline tickets, hotels and much more.
3. Cash back rewards
Maybe points and miles don’t excite and you prefer cash – there’s a rewards program that’s right up your alley. Many credit cards give accountholders the option of earning cash back on purchases. Some programs pay 1% cash back on all purchases, and higher cash back bonuses on select, rotating categories. For example, one month you may earn 5% cash back at grocery stores, and 5% cash back at gas stations the next month. The more you use your credit card, the more cash back you’ll earn, which is redeemable for a check, gift card or statement credit.
4. Travel insurance
Do you travel often? Then you need a credit card that comes with emergency travel insurance. Imagine losing your luggage or having it stolen on vacation. What if you need medical care while away, or what if you crash your rental car? Do you really want to go into your pocket to cover these expenses? A credit card that offers protection in the event of a travel mishap can bring peace of mind.
This article was first published on http://moneyprime.com.