If I had it my way, we should all use credit cards for everything (to earn rewards) as long as we pay our bills fully and do not spend frivolously. But some folks do not really like credit cards because they might cause them to overspend. Even if you think about it this way, I would say that there are certain things where it pays to use the plastic in your wallet. Here are the things I have in mind and why.
Things you should charge to your credit cards:
Jewelry and Antiques: Assuming that these purchases are bargain deals in the first place, purchasing items like jewelry and antiques on a credit card may give you an added amount of safety in delivery insurance or damage or loss protection. The worst thing is to realize you have bought a dud and could not replace it.
Vacations: If you have a rewards card that will earn points (like an airline credit card) or cash back, putting your vacation on your credit card can actually be something that you benefit from, depending on the rewards program. Don’t forget hotel stays even if you aren’t necessarily on vacation.
Airline Tickets: Besides the rewards that are earned from purchasing with a credit card, buying airline tickets on credit will usually include coverage by the travel insurance with the credit card company which can cover anything from flight cancellations to baggage loss. From my experience, the baggage insurance can really come in handy. Obviously, earning points or miles from an airline credit card does not hurt as well.
Hotels and Car Rentals – Most hotels require that you give a credit card number to make advance bookings. Frankly speaking, you really do not want to be using a debit card because if there is any mistake, you will have a more difficult time getting back your money whereas with a credit card, all you need to do is to lodge a dispute.
Some Car Rentals can simply make your life difficult if you do not have a credit card. They might require things like a recent utility bill to “prove” you can pay your bills and that you are credit worthy!
Sporting Events and Concerts: Earn rewards for your favorite sporting events and concerts when purchasing with your credit card, which can usually be redeemed for exclusive tickets in the future. The catch is to check with your credit card company to see which events are included. I have had trouble with companies scamming me before and having the expense charged to a credit card and being able to halt the charges sure came in handy.
Gasoline – Many of the better credit cards pay cash back on gasoline purchases. Very often, it is as high as 3% to 5%. With gas prices always fluctuating and more often than not increasing, earning those precious rebates is one smart way of saving money.
Supermarkets – The supermarket is one place where you definitely want to use your cash back credit card. When you stack up your manufacturers coupon with your store coupon, you will save lots of money. Earning cash rebates would then be icing on the cake. I call this the Triple Stack!
Online Shopping – Many cash back credit cards these days have new online shopping portals. Gone are the days where credit cards offered say 5% on gasoline spending the whole year round. Instead, what they offer now are online shopping portals. This is how it works. You log into account and go into their shopping portal. From there you go to the merchant partners site and as long as you shop with your credit card, you will earn extra rebates. For example, GAP.com may be a merchant partner. Rather than going to GAP.com through your browser, going there through your credit card’s shopping portal (it’s the same site and same products BTW), your purchases will be tracked differently for the purpose of earning you the rebates. Issuers like Discover and Chase all have shopping portals.
Expensive Appliances and Electronic Gadgets – Many of the better credit cards offer features such as purchase warranty and extended warranty features. A typical purchase protection feature means that if a product is accidentally broken and the retail store will not accept it, the purchase warranty protection kicks in and protects the buyer from monetary losses.
More importantly is the extended warranty protection. Many extended warranty feature extends the length of the manufacturer’s warranty for up to one year. This can save you money because you typically have to pay for an extended warranty protection from either the retail store or from the manufacturer themselves.
Parting Words – Even if you are not a credit card fan, there are times when using them really makes sense. Hopefully, these examples will convince you. Obviously, paying your credit card bills in full is a prerequisite.
The preceding was a guest post by AskMrCreditCard.
Friday, November 19, 2010
Thursday, November 18, 2010
Master Your Debt | Book Review
How Did We Get Here? And Where Are We?
The book starts off with a little bit of history concerning the recession that started just a few short years ago. There’s a ton of information concerning what steps the government took in terms of new regulations and stimulus funds after the financial meltdown occurred. Finally, there’s a very detailed list of the major types of debt Americans often carry – everything from mortgages to credit cards to student loans. This list explains how the debt works and alerts us to any new government or industry regulations.
Find Out Where You Stand
“Don’t lie to yourself about your money.” That’s the most important information in this chapter. Here, Goodman explains why you need to know the cold hard facts about your financial situation. You can’t improve your finances if you don’t know how much debt you have or how much money you’re actually spending every month.
Other People Are Grading You, Too
Be aware that other people (corporations and computers really) know a lot about your personal financial situation. Credit reports and scores allow other people to check how much debt you carry, if any, and how well you’re paying it off. There’s a good run down here of how exactly credit reports work and how to check yours.
Avoiding a Modern-Day Identity Crisis
Identity theft can cost you – both money and many wasted hours putting your life back together. This section provides some relatively common sense tips on how to prevent being a victim along with how identity theft really works.
Win the New Mortgage Game
The mortgage industry was a very effective catalyst in causing the financial crisis. Loans were being given to people who had no business borrowing money and the banks (along with many homeowners) got bitten when those individuals could no longer make payments. This chapter has a detailed run through of the different types of mortgages available now and some ways to pay your mortgage off faster.
Mortgage Free in Five to Seven Years
HE-What? This chapter explains the “secret” way to pay off a mortgage in 5 to 7 years (it is called a Money Merge Account). Did you just get that feeling in your stomach when you know something isn’t quite right? I know I did. Basically, this “system” has you take out a home equity line of credit on your house. You pay off your house with your HELOC. Then, you deposit your paycheck directly into the HELOC. You pay all of your bills through this line of credit. And because of the way interest is calculated on a HELOC, you end up paying it off very quickly.
I’m not saying that this method can’t work. On the surface, it seems like the math adds up. But the author’s promotion of companies tainted the information. This method also appears, to me at least, to only be appropriate for high income individuals with no debt other than a mortgage.
Credit Cards: Just Because It’s Called MasterCard Doesn’t Mean It’s the Boss of You
The credit card scene has changed dramatically over the past few years and this chapter spells out how to navigate those changes. Information on how to pay off credit card debt is present and how to get the most from cards (if you can use them responsibly).
Car Deals: Making Sure You’re in the Driver’s Seat
Buying a new car is almost never a fun experience. Chapter 8 deals mainly with how to pay for your car. Included is information on whether hybrids are really worth the upfront cost and what sources to use when researching a vehicle.
Oh and there’s a sales pitch for CarQ, a car buyer’s agent. Basically, you pay them a fee and they handle the business side of getting you into a vehicle.
Finally, there is lengthy discussion that presents leasing as a relatively good option when it comes to getting wheels. The author says “leases can be a particularly good deal for . . . drivers who like to get a new car every three years“. Who doesn’t want a new car every few years? I sure do. But that doesn’t mean I’m going to throw away money on a vehicle I won’t even own after 3 years. Leases are almost always a bad deal.
An Education in College Costs
Primarily, this chapter shows you how to save up for a child’s college education. More applicable to my own situation is the section that details how financial aid works and what federal loans are available.
Don’t Let Bad Luck Derail Your Finances
Look honestly at your debt situation to see whether or not you can handle paying everything off by yourself. You might need debt consolidation help from a credit counseling agency. There are tips and guidelines on how to handle calls from collection agents.
Surviving Bankruptcy
Why, When, and How to declare bankruptcy are discussed here. I thought that bankruptcy was presented a little too favorably, but I do agree that it’s the right thing to do for people who honestly don’t have other options.
Debt Strategies for Every Age
Everybody is different. Here, we see different strategies for different age groups. The section specifically for teens and 20-somethings was of interest to me and would be useful for anybody getting ready to graduate high school.
Permanent Mastery, Going Forward
The last chapter is a summary of previous information along with some general advice: keep good records, ask questions, watch the bottom line, etc.
The book starts off with a little bit of history concerning the recession that started just a few short years ago. There’s a ton of information concerning what steps the government took in terms of new regulations and stimulus funds after the financial meltdown occurred. Finally, there’s a very detailed list of the major types of debt Americans often carry – everything from mortgages to credit cards to student loans. This list explains how the debt works and alerts us to any new government or industry regulations.
Find Out Where You Stand
“Don’t lie to yourself about your money.” That’s the most important information in this chapter. Here, Goodman explains why you need to know the cold hard facts about your financial situation. You can’t improve your finances if you don’t know how much debt you have or how much money you’re actually spending every month.
Other People Are Grading You, Too
Be aware that other people (corporations and computers really) know a lot about your personal financial situation. Credit reports and scores allow other people to check how much debt you carry, if any, and how well you’re paying it off. There’s a good run down here of how exactly credit reports work and how to check yours.
Avoiding a Modern-Day Identity Crisis
Identity theft can cost you – both money and many wasted hours putting your life back together. This section provides some relatively common sense tips on how to prevent being a victim along with how identity theft really works.
Win the New Mortgage Game
The mortgage industry was a very effective catalyst in causing the financial crisis. Loans were being given to people who had no business borrowing money and the banks (along with many homeowners) got bitten when those individuals could no longer make payments. This chapter has a detailed run through of the different types of mortgages available now and some ways to pay your mortgage off faster.
Mortgage Free in Five to Seven Years
HE-What? This chapter explains the “secret” way to pay off a mortgage in 5 to 7 years (it is called a Money Merge Account). Did you just get that feeling in your stomach when you know something isn’t quite right? I know I did. Basically, this “system” has you take out a home equity line of credit on your house. You pay off your house with your HELOC. Then, you deposit your paycheck directly into the HELOC. You pay all of your bills through this line of credit. And because of the way interest is calculated on a HELOC, you end up paying it off very quickly.
I’m not saying that this method can’t work. On the surface, it seems like the math adds up. But the author’s promotion of companies tainted the information. This method also appears, to me at least, to only be appropriate for high income individuals with no debt other than a mortgage.
Credit Cards: Just Because It’s Called MasterCard Doesn’t Mean It’s the Boss of You
The credit card scene has changed dramatically over the past few years and this chapter spells out how to navigate those changes. Information on how to pay off credit card debt is present and how to get the most from cards (if you can use them responsibly).
Car Deals: Making Sure You’re in the Driver’s Seat
Buying a new car is almost never a fun experience. Chapter 8 deals mainly with how to pay for your car. Included is information on whether hybrids are really worth the upfront cost and what sources to use when researching a vehicle.
Oh and there’s a sales pitch for CarQ, a car buyer’s agent. Basically, you pay them a fee and they handle the business side of getting you into a vehicle.
Finally, there is lengthy discussion that presents leasing as a relatively good option when it comes to getting wheels. The author says “leases can be a particularly good deal for . . . drivers who like to get a new car every three years“. Who doesn’t want a new car every few years? I sure do. But that doesn’t mean I’m going to throw away money on a vehicle I won’t even own after 3 years. Leases are almost always a bad deal.
An Education in College Costs
Primarily, this chapter shows you how to save up for a child’s college education. More applicable to my own situation is the section that details how financial aid works and what federal loans are available.
Don’t Let Bad Luck Derail Your Finances
Look honestly at your debt situation to see whether or not you can handle paying everything off by yourself. You might need debt consolidation help from a credit counseling agency. There are tips and guidelines on how to handle calls from collection agents.
Surviving Bankruptcy
Why, When, and How to declare bankruptcy are discussed here. I thought that bankruptcy was presented a little too favorably, but I do agree that it’s the right thing to do for people who honestly don’t have other options.
Debt Strategies for Every Age
Everybody is different. Here, we see different strategies for different age groups. The section specifically for teens and 20-somethings was of interest to me and would be useful for anybody getting ready to graduate high school.
Permanent Mastery, Going Forward
The last chapter is a summary of previous information along with some general advice: keep good records, ask questions, watch the bottom line, etc.
Subscribe to:
Posts (Atom)