The Rewards of Credit Cards

Credit cards if used wisely can yield a number of rewards. Hard to believe right? Credit card companies are in the business of making money and would do anything to squeeze that last dime (scratch that, I mean penny) out of your hand. Before you begin lashing out at me for writing the first sentence, let me clarify what I am trying to say or better yet, let me rephrase – Knowledge is key in ensuring you take advantage of the multitudes of benefits that a credit card offers. Ah! Much better.

Have you ever gotten up in the morning, opened the door and began walking without knowing where your journey would end and how to get back to your starting point. Some creative thinking readers would argue that we do it everyday and I understand your reasoning but the question is – Can you take a journey without planning for it? The answer is yes you can but imagine how the journey would be. You would be taking a chance on possibly enjoying your journey or possible not. One of my mottos’, never leave your life up to chance (for the philosophical readers I will add - if you can). Take a page (it would be proper to say screen shot) from the TV reality show, The Amazing Race. The players who plan their journey before they leave out, or who come up with a strategy before tackling a road block excel much better and make it to the pit stop faster than those who dive into it without one. To quantify this for the mathematicians reading, with everything being equal, the probability of one enjoying a journey embarked upon is greater than 50 % and increases in probability as planning becomes more specific.

The same goes for your credit card. The probability of you making your credit card work for you increases with your knowledge power on the subject. In this article, I have outlined the advantages you would be able to reap from your credit card if you comprehend how to take advantage of it. I will start with the ones that put a smile on your face and end with the ones that make you say (well some of us) – Oh! I did not know that.

The freebies – Some of us have not had the ability to be on Oprah when she is giving away her holiday specials. I have always dreamed about being one of the audience members shouting - Oh, my God, Oh, my God as she presents me with my brand new BMW. I saw the Secret and have been applying the power of positive thinking.

Credit card companies are now playing the Oprah card with a twist, dangling free items in your face to entice you to use their credit card. These free stuff range from cash rebates on purchases to free airline tickets. If you pay your bills before your grace period is up, the gift is great but if you don’t, your gift is not worth the value you paid to read this article (which is free) when you are hit with the interest rate. I must say however, whoever came up with the idea to apply this skill to the credit cards is ingenious. Do not get me wrong I am all about calling out and frowning at tricky practices, but there are some that you just have to give a standing ovation to when you find out about it. They are simple yet so well devised that even as a victim of the practice you can’t help but say – WOW! Read more about freebies in the article: Credit cards! Freebies! Why?

Convenience – No more waiting in those long bank lines anymore to withdraw $5.00 to buy lunch on the happy menu. Now all you have to do is whip, swipe, charge and be on your way.

Manage bank fees - Some banks charge an in house bank withdrawal fee if you pass your designated limit of in house visits. You can make as many purchases with you credit card and then send in one check to make payment before your grace period is up. You save on checks, and also improve the environment by using less paper.

Safety – A mugger asks for your purse or wallet, the only thing in there is a whole bunch of receipts and your credit card. Before the mugger can turn the corner, you can call your credit card company and report it stolen. The only thing the robber achieved was getting in a days exercise running the scene of his crime.

Did you know that the federal aviation authority classify check and cash payers as more risky fliers than credit card payers. Paying with a credit card eliminates (or better said reduces tremendously) airport hassles.

Stop Payments – If you purchase an item over the phone or internet and it is not what you ordered, you can stop the payment for the item and get your money back.

Extended Warranty – Credit cards offer extended warranties on some of the items you purchased on the card. We all know that an item breaks down a couple of days after the manufacturer's warranty has expired. Check your credit card, the free warranty on the card can pay for the repairs.

Theft and Damage Protection – Yes, believe it or not, your card does protect you against stolen or damaged items that were purchased with your credit card.

Taking advantage of bargains – How many times have you walked into a store and an item cost almost $30 more than what you saw on the internet.

Delay of payments – You have 25 to 30 days before you can make a payment without interest being charged. This means you have this time to come up with a payment if you did not have the money to pay for the items when you bought them. On the other hand if you did have the money, it may be put in an interest earning account to earn some money before the grace period is up.

Financial organization – Purchasing items with your credit card gives you a complete record for the month or billing cycle of transactions. This comes in handy when filing your taxes especially if it is for business purposes.

Credit rating – Paying your credit card on time indicates you meet the stipulated requirements of the credit card company and as such improves your credit rating.