Continuing from part 1:
A word of caution – many people misuse their low rate credit cards in impulse spending, thinking that the interest penalty may not be as high.
So it’s best to reduce your card limit based on your actual needs in the first place, rather than get a high limit and blow it all.
4. Point based cards
If you aren’t struggling with your expenses, and paying back your bills in time, then you may look at other credit card options. The most common is the point based card.
Most banks run points programs with their credit cards, implying that you, as a user, can earn loyalty points for every dollar of your purchase. Over months, you may accumulate your points and exchange them in shopping or dining out.
Here, it is always important to check what are the ways to use your points. If you love dining out, check if you can get discounts with your cards through special tie–ups by your bank, or if your bank’s points program enables you to use those points in dining.
Similarly, if you love shopping, check whether the program offers you anything worthwhile. Remember, you will still need to pay your annual fee, so it’s best to choose a credit card program that aligns with your needs.
5. Airline points based cards
A special category of point based cards is an airline points based cards. It means that instead of getting bank based points that you can spend on the bank’s reward scheme, you bag airline points or miles for your dollar spends.
Over time, you can exchange your points for airline tickets, and so it’s very appealing to those who love traveling. Once again, these cards come with annual fees – so, don’t sign up unless you love traveling, or you know how to utilize your airline points.
When it’s all said and done, it’s always best to explore card options before you go ahead with any particular card. Banks offer a wide variety, and even offer fee waivers during promotions.
Many websites help compare cards, so use these to understand which card offers a better deal. Even banks offer credit card comparisons to compare their own set of cards (Here’s one for example: https://www.usbank.com/credit-cards/compare.html)
So be on the lookout and get the right card – and yes, whatever happens, plan to make your payments in time!
And don’t forget to share this with your friends – you might actually help them get a better grip on their penalties or card points!
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