It is great to have a good credit card. Just one of those cards you can whip out at a moment’s notice and flash it around for everyone to be able to see the gold or platinum stripes on it, and marvel at your financial wisdom for being able to score of those big ones. It feels good, doesn’t it? |
But what price are you really paying for that piece of plastic? Is it really worth all that you have gone through to get it? I mean, think about it – you are paying 18% interest and it comes from some no-name bank. Are you really impressing people with it, or is that a look of actual pity instead of envy?
You need to be careful and cautious when you get a credit card these days. There are all kinds of banks who are willing to compete fiercely for your business, but how serious about it are they? If they are willing to offer 18% interest, I would say they are not real serious. If they don’t offer a generous credit limit, a low interest rate, a balance transfer option, and other things that go with the real brand name premium cards, maybe their elite card is not as elite as you thought it was in the first place.
There are a variety of cards available for you, but you need to know how the game is played, and you also need to know what benefit you get from it, in addition to the purchases you make with it. For example, there are the affinity cards, like from airlines or car rental companies. Every dollar you spend on their card goes towards a free upgrade or some subtle thing that they offer. If these are the kind of services that you use on a regular basis, then this might be the best card for you.
Do you feel charitable? If so, you may want to consider one of the cards where a percentage of every dollar or a percentage of every purchase goes towards your favorite charity or mission. There is something very nice able being able to purchase something and know that you are also helping out the children’s orphanage or the local community blood bank.
Then there are the department store credit cards. You have seen these when you visited that department store – you can save 15% on your purchases today if you get one of their credit cards. That sounds good so you sign up. But then you discover that savings that 15% was not such a good deal after all, because the credit card they issued you has an interest rate of somewhere between 20% and 30%. Ouch! That is higher than most credit cards from banks!
The bottom line is to watch what kind of credit card accounts you open. Whether it is a department store card or a Visa or MasterCard or Discover, one of the places that will eventually find out about it is the credit bureaus via your credit report. Even if you have a zero balance on most of your credit cards, the fact that you have 148 credit cards that you COULD max out tomorrow is enough to make them squirm if you go to apply for credit on a big ticket item.
If you do not need the credit, then don’t apply for it, because having that extra credit card in your wallet could do you more harm than good. Jon is a computer engineer who maintain a variety of web sites based on his knowledge and experience. For more information about Credit Cards, please visit his web site at Credit Cards.
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