The introduction of Credit Cards features are non-stop. After discussing about vanilla cards or prepaid credit cards, I think it’s worth our time looking at the features. Just like cellphones and computers, issuers are creative enough to come-up with new features to make it more appealing to cardholders and to those planning to be one. Here are some of the features that everyone should know about…
Credit Card Features
Gold and Platinum cards
Once reserved for the rich and famous, these cards are now available to almost everyone, but they come with higher fees and an assortment of other services you’re unlikely to actually ever use. I do think that these type of cards are merely for posturing purposes of the card holder. But would it be fair to say that issuers are really gold diggers?
Reward Cards
These reward users for the money charged on the card. Airline mileage cards – where you accrue a mile for every dollar purchased – make sense for frequent business travelers. Other cards (like Discover) reward customers with cash – for example, a 1 percent cash rebate on all purchases made during the year.
Affiliate Cards
Affiliates allow retailers to partner with major credit-card brand names. as a result, you get credit from VISA or MasterCard plus discounts on merchandise at the retail partner’s store. Some cards also offer rewards, like a percentage off on your next new purchases.
Insurance Protection
This will protect your finances by paying off your credit-card balance in case of death or disability. It is expensive and unnecessary if you have other insurance and don’t tend to carry a large balance. There is also theft and loss insurance and don’t tend to carry a large balance. There is also theft and loss insurance and don’t tend to carry a large balance. There is also theft and loss insurance for the credit card itself, but current laws make this largely unnecessary.
Purchase Protection
Some cards, particularly the gold and platinum variety, offer merchandise guarantees on purchases made with that card. If something breaks in, say, a year, the credit-card company will reimburse full value for the product purchased.
You are not responsible for illegal purchases charged to your credit card if you report your card stolen before a fraudulent purchase was made. If your card was used before you reported it stolen, your maximum liability is $50 for each credit-card account. And if the purchase was done through the Internet, your liability is zero. By the way, since you are already protected, don’t bother buying credit-card insurance.
Good Credit, and How to Get it
You may or may not use a lot of credit in your daily finances. While most homeowners have a mortgage, the use of other forms of credit depends a lot on your spending habits and the lifestyle choices you make. Good credit habits entail reasonable levels of debt, reasonable use of credit, and highly consistent and timely payments on outstanding debt.
Good credit provides potential buying power and indicates good financial habits. Good credit means that you’ve kept reasonable debt levels for your income and lifestyle profile, and you have a solid personal financial system to manage the debts you have. Your credit can be objectively measured, and credit scores will be explored – but first let’s review the factors that lead to good and bad credit.
Good Credit Ratings
What makes you have good credit? From a credit-quality standpoint, lenders loot at your dependability in making payments and keeping debt levels below certain thresholds. Some lenders, however, might evaluate you based on your potential profitability – so it is not only whether you pay bills on time. But if you leave large balances – debt – on the cards at high interest rates. Pay off your balance monthly, and credit-card companies will gripe that you’re unprofitable.
You should, as a consumer, strive to achieve the highest possible quality of credit rating. But there’s no compelling reason for you to be highly profitable to credit-card companies, and for the most part you should avoid habits that make lots of money for them. Credit quality is a function of your “ability and willingness” to pay – whether you can pay your debts and whether you actually do, reliably and dependably.
Lenders don’t have any good way to track your assets, so asset-rich income-poor retirees may have trouble getting credit. But they do look at credit limits and lines and the percentage of those limits tapped – not just the amount of debt carried.
Next, we’ll discuss factors widely recognized as responsible for determining good credit.
