The one thing that may help us get through the major economic mess the world is in at the moment is the credit card bonuses that most financial institutions offer. If you are like the majority of people in the world, then your salary just somehow never seems to be sufficient to cover all your monthly expenses. Whether you like credits cards or not, they do help a lot That is, they do help if one uses them wisely and takes full advantage of the credit card bonuses that are offered.
There are so many institutions that offer what may seem like incredible deals that it is difficult to choose which deal is the best. The other problem is that if we do not thoroughly peruse the terms of the credit card, we may think that we are getting a great deal on the credit card bonuses, when we are actually being caught out on other factors.
In this article, we will attempt to provide you with some general information, pros and cons of various cards and credit card bonuses and even some tips on what to look out for and what to be wary of. Of course the final choice of whether to use a credit card or not, and which one to use is yours.
Making sure that you know all the facts pertaining to bonuses, payback periods, APR percentages and annual fees are very important. This is especially so if you are a single parent, as there are many pitfalls that need to be avoided. It is no good getting a credit card that is going to create more problems in your already very tight budget.
Types of Credit Cards
A crucial fact to bear in mind when thinking about applying for a credit card is what category of card will suit you. Here are some of the types of credit cards on offer:
- Business Credit Cards – essential for all sizes of business.
- “Poor Credit” Credit Cards – to establish a better credit rating.
- Pre-Paid Cards – Deposit money first, no credit checks can assist in building credit history.
- Secured Credit Cards – deposit funds first, report to credit bureaus can be used to rebuild credit status.
- Student Credit Cards – Perfect for students to establish good credit rating, low interest rates and other benefits and credit card bonuses.
- Airline Rewards Credit Cards – earn frequent flyer miles, travel discounts, and other privileges.
- Cash Back Cards – a percentage of monies spent is paid back as a reward, various bonus rebates.
- Gas Rewards Credit Cards – gas discounts when purchasing gas with card.
- Hotel Rewards Credit Cards – discounts and/or free hotel stays.
- Travel Rewards Credit Cards – cash, points or miles can be earned for rebates on travel expenses, transport and accommodation.
Now that we have a bit more of an idea of the types of credit card bonuses that are on offer, it is time to see who you would like to do business with viz a vis applying for a credit card. There are many financial institutions who offer credit card rebates, but in this instance I will stick to banking institutions.
It is impossible to list all financial institutions in one article, but let us take a look at some of the major institutions who offer credit cards:
- The Bancorp Bank – prepaid credit cards for those who have a bad credit or no credit history because they have never purchased on credit.
- Simmons First National Bank – personal and commercial credit cards with various perks.
- Citibank – offers a variety of cards such as personal, business and student cards, merchant cards and branded airline cards.
- American Express – internationally recognised various personal and business cards and good credit card bonuses offered.
- Discover – range of personal and student cards, variety of rewards and types of card.
- HSBC Bank – range of cards, including some for those who do not have a great credit history.
- Applied Bank – secured credit cards for no credit history and not-so-great credit history consumers.
- Metabank – prepaid cards, poor or limited credit history, guaranteed approvals, and no credit checks.
- Public Savings Bank – Exists for 80plus years, cards which can help you fix your bad credit rating.
Tips For Selecting the Best Credit Card for You
As wonderful as all these offers sound, there are a few things that you need to bear in mind, before rushing out and applying for a credit card. The chief of those is that financial institutions are in it to make a profit, so any credit card bonuses will usually have a few hidden or artfully concealed cons or terms attached to them.
In order to ensure that you do not get caught on the back foot by any of these pitfalls, here are a few tips you should heed:
- Read the fine print – are there restriction dates, or dates on which you cannot use your frequent flyer miles? Must you only use certain companies?
- Know your average annual expenditure – some companies will offer better credit card bonuses depending on how much you spend each year; some will offer lesser bonuses if you do not spend the amount you said you would.
- If it is usual for you to only pay the minimal amount due – reward cards may not be the answer, as some have annual fees and charge higher interest rates on cards that carry over balances. These fees may exceed the benefits of the rewards or credit card bonuses offered.
- Not all bonus cards charge an annual fee – although many of them do, there are just as many that do not and this could be relevant depending on what the bonus offered is.
- Apply for a co-branded credit card – shopping at a store with a credit card that bears their log normally yields better credit card bonuses.
- Opt for cash-back where possible – shop around to get the best deal on this as all cards differ.
Is your mind boggling yet? Do you want to just pull your hair out and run down the road screaming because this is just too much information for you to handle? Have no fear, it is not that difficult.
Sit down quietly at a desk or table with a cup of tea, and relax Now answer these few questions and you the answer as to what type of card you should be looking at and which credit card bonuses would be more beneficial to you will become apparent to you rather quickly.
- Do you need a business credit or a personal credit card?
- Can you afford to pay annual fees?
- Do you need to fly often – would frequent flyer miles benefit you in any way?
- Will discounted or free gas benefit you?
- Will cash-back credit card bonuses be more beneficial to you or product rebates?
- What would your estimated annual expenditure be?
- Will you be able to pay back more than the monthly minimum?
- Do you have a credit rating, and if so is it a good one?
Do not rush into applying for a credit card, because once you have applied you will probably receive it with lightening speed (never to be experienced again by that institution unless you are in arrears, by the way). Go onto the internet and do some research into the credit card bonuses that are currently on offer. You can also pop into various institutions and get marketing material regarding current deals. Always check whether their are offers avialble with preferential rates or terms based on your single parent status.
Make Sure Your New Card Works For You, Not Against You
Even if you have done your homework, and applied there are still ways that you could lose out on the credit card bonuses, or that those great bonuses could actually cost you money. Your responsibility does not end with applying for the right card for your circumstances. In actual fact it only begins there.
In order to make sure that the card is working for you and not against you, there are a few guidelines that should be followed:
- Do not carry over a balance from month to month. These institutions make their money off of the interest you pay, and if you only pay the minimum required you will end up paying an astronomical amount of interest.
- Make sure that you know what all the credit card bonuses are and use them.
- Always pay your account on time, earlier if possible as even one late payment could mess up your bonuses and your overall credit rating.
- Never overspend in order to get credit card bonuses.
- Redeem any rewards or bonuses promptly so they do not expire.
- Don’t use your credit card for small everyday purchases like a loaf of bread and a gallon of milk.
- Be very wary of cash advances that credit card companies may try to smear off on you. These are not credit card bonuses but advances which need to be repaid, and the interest is normally higher than that for your credit card.
Although the laws regarding the granting of and controlling of credit cards have changed recently and are meant to makes things easier for the consumer, if you do not play your part in all of this you could still end up with problems, with or without credit card bonuses. The bottom line is that credit cards can be very beneficial to single parents, but only if used responsibly