Credit card companies bad?

Regular visitors to this corner of the blogosphere (can spheres have corners?) may have gained the impression that the resident writer isn’t a huge fan of credit card companies. Well, to some extent that’s true. Too many of them seem to bury “gotcha” clauses in their agreements, and become almost viciously predatory the moment a customer gets into trouble.

But none of that prevents a recognition of the enormous benefits that credit cards themselves can bring, especially to those who are responsible and self-disciplined. So let’s explore and celebrate some of the unique qualities of these cards, and especially those that are usually unavailable to debit card users.

Credit cards good?

Earlier this month (September 10), this blog reported a study by Javelin Strategy and Research that showed that consumers were increasingly leaving their credit cards in their wallets and using debit cards instead. Yesterday, the San Francisco Chronicle and The Connecticut Watchdog both quoted Javelin’s figures in features that reminded readers why this trend could be a mistake, and how credit card use is often the better choice. Here are some of the arguments put forward:

1. Purchase protection

You don’t have to pay for disputed items on your credit card account until the matter’s resolved. But once you’ve paid for something on your debit card, your money’s gone. That gives you much less leverage with suppliers of shoddy, misdescribed or defective goods.

2. Theft protection

If someone steals your debit card and PIN, you could be liable for all their spending. And you may have to pay up to $500 if your debit card goes missing but you fail to report its loss or theft within two working days. Credit cards generally better limit your exposure.

3. Price protection

Many credit card companies refund the difference if you find exactly the same item you’ve recently bought being offered cheaper elsewhere. It’s unlikely that your debit card issuer would do the same.

4. Fewer fees?

Credit card use often carries lower fees than those for debit cards. It’s worth comparing your bank’s fee structure with your credit card companies’ to see which is offering the best deal.

5. More perks

Many credit cards offer genuinely valuable perks such as roadside assistance, car rental loss/damage cover, trip cancellation/interruption insurance, extended warranties, lost luggage cover and so on.

6. Credit score boosting

Responsible credit card use is one of the fastest ways to improve your credit score, which is likely to give you access to lower rates for big purchases, including mortgages and auto loans.

7. You get credit!

With a debit card, you’re spending your own money from day one. With a credit card, you could get to use the issuer’s money for free for up to 45 days. And, of course, you can spread payments over a long period, if necessary.

Which card might suit you?

Picking a card involves matching your lifestyle and spending habits with the most suitable product. Here are some cards that are worth exploring further:

  • If you carry forward a big balance each month–Chase Freedom® Visa offers a one-year, zero percent APR on balance transfers and six months on purchases.
  • If you spend a lot but don’t carry forward balances–Discover® More® Card has no annual fee and unlimited cash back rewards than never expire.
  • If you want travel or points-based credit card rewards–browse through offerings from American Express.

Most popular / best credit cards according to IndexCreditCards.com visitors:

  1. 1. Discover® More Card – 0% APR on balance transfers for 12 months & 6 months on purchases, 5% cashback bonus in popular categories, up to 1% cashback bonus on all other purchases
  2. 2. Chase Freedom Card – 0% Intro APR and no Annual Fee, 5% bonus cash back in popular categories , 1% cash bank on everything else
  3. 3. Citi® Platinum Select® MasterCard® – 0% on purchases & balance transfers for Up to 18 months, APR as low as 9.99% variable. $30 statement credit.
  4. 4. Blue Cash® from American Express – Earn up to 5% cash back on gas, groceries and drug store purchases, and up to 1.5% back on all other purchases, no annual fee, fast approval under 60 seconds
  5. 5. Slate SM from Chase – 0% Intro APR, Now with Blueprint, patented fraud protection

  6. 6. American Express® Gold Card – 10,000 American Express Membership Rewards bonus points when you use the card for at least $500 in purchases within the first 3 months.
  7. 7. TrueEarnings® Business Card from Costco & American Express – 4% cash back for annual gas purchases up to $6,000, 3% restaurants, 2% travel, 1% everywhere else, 0% APR on purchases for first 6 months

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