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What you Need to Know About Every Credit Card in your Wallet

Credit cards are financial products that can be complex and are able to cost you a lot of money. There are some important factors about the credit cards that are in your wallet that you need to know.

The Card Issuer and the Processing Network

There are only four processing networks for your credit card, those being Visa, MasterCard, Discover and American Express. There are many credit cards so the credit issuers name is printed on the front of the card like Capital One.

With some credit cards though like retail cards the card issuer is not as obvious. To find out who issues your credit card look at the back of your credit card or your billing statement.

The Annual Fee and When its Charged

The annual fee is only charged once a year and they can sneak up on you. Credit cards that have the fee will usually assess it during your anniversary month. You should make a note of the fee so you know when it is coming and ensure you have enough available credit for it.

The Interest Rates on your Transactions

Credit cards will have different interest rates for purchases, cash advances and balance transfers. If you have only just got a credit card then you may enjoy promotional rates.

If you will never use balance transfers or cash advances then you do not need to keep up with these interest rates, but you should know the interest rate for purchases.

Keep an eye on your credit card statement and billing statement inserts to track the changes to your rate.

Paying Late Penalty

Pretty much every credit card will charge a fee for a payment that has been received after its due date. In order to find out what your late fee is you will need to read your credit card terms.

If you are more than 60 days late on your payment then your credit card issuer can impose a penalty rate.

The Penalty for Exceeding your Credit Limit

The credit limit is the amount that you are allowed to spend on your credit card. Any charge that exceeds the credit limit will be declined by your credit issuer unless you have opted in for over the limit charges.

If you have opted in then you need to know what the penalty is for going over the limit.

Your Balance and Available Credit

If you have a few credit cards then you will need to know the balances for all of them so you which credit card you can use and what you are able to purchase. Also this will help you to know the amount of debt that you have.

Balance Transfer and Cash Advance Fees

If you ever plan to make either of these transactions then you will need to know the fees associated. You will then need to read your credit card terms to know the fees, as these can actually be expensive.

The Rewards that you can Earn

Credit card reward programs can be complicated. If you have a credit rewards card then you will need to know what will earn you rewards and the rates. Not only do you need to know how to earn rewards you will also need to know how to redeem them. Your credit card issuer might automatically redeem your rewards once you have a certain amount or you may have to visit a certain website to redeem them.

How to Save Money with Credit Cards

When you are credit savvy you are able to use your credit card to benefit you so that you can save money even whilst you are charging on credit.

Here is how you are able to save money through credit card use.

Consolidate your Credit Card Debt with Care

A common strategy that consumers use to trim what they owe on cards is to use balance transfer credit cards that have a 0% or low APR on the balance that is moved for a limited time.

You will need to perform a cost benefit analysis before you choose this plan as most cards have a balance transfer fee. You also need to make sure that you are able to pay off your consolidation debt completely before the promotional period ends.

Use Rewards Cards if you Can Pay in Full

Rewards are great, but in order to offset the rewards, the reward credit card will usually have a higher interest rate. In order to make the rewards work for you, you need to be sure that you can pay your balance off in full every month. If you cant then a lower interest card might be a better choice.

Pay More than the Minimum

Having good payment habits is vital with a credit card. By doing this you will be able to avoid high finance charges and penalties. It is always best to pay your credit card balance in full and if you are not able to that then you need to pay more than just the minimum, as this will save you money on interest.

Always Research

Before you sign up for anything you will need to compare credit card offers.

Too Many Cards

You shouldn’t collect rewards cards as having too many could prevent you from optimizing your rewards on any card. Also when you have too many cards you are more likely to spend more then you should or can afford.

Don’t Rely on Credit Cards for Emergencies

If you don’t have any savings then an unexpected expense will end up on your credit cards and having a balance means you will pay extra interest. This means that relying on your credit cards will be great expenses in the long run.

Have a Spare Card

If you are interested in taking advantage of rewards then you can own one, but only use it on items that you know you are able to pay of in full in every month. You can then apply for another card that has a low interest rate as this card you can afford to own with a balance.

Ask your Card Issuer to Lower your Rate

If you have a good history as a card member then you may have some leverage. When you have been a customer for a while, then call your card company and discuss if they are willing to give you a break on the rates.

Credit Card Benefits that might Surprise You

Credit cards don’t just make it easier to shop, but also have a number of free benefits that many consumers you are not even aware of.

As long as you use your card responsibly and pay off your balance each month in full and on time.

You might even consider paying for more of your purchases at a credit card terminal.

When you pay with credit you are able to get help from your credit card company if you do not get what you paid for, find a lower price, change your mind or need some extra cash.

Charge Backs

If the company doesn’t come through on a product or service that you paid for and they won’t refund you, your credit card company might. This process is called a chargeback.

The credit card company will refund the money to you and then charges the cost to the business. You might have to meet some conditions in order to claim a chargeback.

Extended Return Policies

Retailers generally limit their returns to 30 days, but credit cards can extend this policy to 90 days.

Extended Warranties

Your credit card could extend your protection on a one-year warranty to two years.

Price Protection

If the retailer that you bought a product from doesn’t have a price drop policy, then you can recoup the savings that you missed out on directly from your credit card company.

Damage and Theft Protection

Your credit card could cover accidental damage or theft within a certain number of days after purchase.

Batch Credit Card Processing

Batch credit card processing is the process of a merchant processing all of the credit card transactions that they had in a day after the end of business or at a time that has been determined by the credit card processor. This is the second step taken by the merchant so they are closer to getting paid for its customer’s credit card transactions.

The merchant will send the authorization codes for every credit card transaction to its payment processor. The processors will then categories the transactions by the bank that issued each customers credit card. The banks will then remit the payments to the merchant, which is called settlement.

The Break Down

In order for the merchant to get paid for a customers credit card purchase the first step is authorization. This happens when the purchase takes place as the credit card information and the amount for the transaction is sent to the credit card issuer. They will then verify the owner of the card, if it has been reported stolen and if the customer has enough credit for the transaction.

After the business has closed the merchant will need to transmit the days credit card transactions to the bank.

The bank will then subtract a fee and ensures that the merchant will get paid for the transactions in that batch. The bank also informs the customers credit card issuer of the transaction so that it can be posted to the cardholder and informs them that the merchant has been paid.

The process to get the funds for the batch can take a couple of days.

Credit card batching can be set up so that it is dine automatically every day at the same time.

Your Kids First Credit Card

Pretty much every young adult falls into the trap of credit card debt. This is because credit cards allow for the buy now and figure it out later approach.

It is then important for parents to teach children good credit card habits.

There are a few reasons that parents may get their kids a credit card. These are:

Building Credit

The biggest reason that parents will help to get their children a credit a credit is to help them to build credit. Having a credit history is good, but it’s not the most important reason. Credit scores is not that dependent on how long someone has had a credit card. When you look at it in reality most people that have a credit card with the ambition of building credit often end up damaging their credit score as they use the card irresponsibly.

If you want to help your child build credit then you need to help them in building good habits.

Creating Healthy Habits

Whilst your children are still willing to listen and are under your roof, you need to teach them good habits and a healthy mindset with their credit cards.

The majority of people find that they become overwhelmed with debt because of irrational purchases. You will need to teach your child how to distinguish between needs and wants.

Avoiding Impulse Purchases

You will need to examine your children’s monthly purchases and process the rationale behind each of these purchases. You are able to help your kids gain a better insight into impulsive thinking and buying, which can lead to spending more then they can afford.

As a parent you will also need to enforce timely payments of the entire months charges. This way you will teach them about money and you will help them to avoid high balances and late payments, which can be detrimental to their credit, score.

Creating a Safety Net

Good credit habits are something that parents hope their children will learn on their own, but young adults will make mistakes and will learn from it.

The problem is that these mistakes stay on credit reports for seven years.

The last reason that you may want to get your children a credit card whilst they still live with you is that you can provide them with a safety net. You are there to watch them, guide them and help them if needs be.

The Best Type of Credit Cards for Your Kids

The best time to get your child a credit card is in high school, but rather start them with a debit card that takes the money directly from a bank account.

This allows then to get use to the responsibility of a card and not buying more than they can afford. You should get a debit card account that has an overdraft protection to avoid overdraft fees.

You can get them a first gas credit card when they start to drive. A gas credit card will start them on the right path for when they get their first credit card.

A good time to get them a first real credit card is after they have graduated high school. Get them a credit card that has a low limit, a low interest rate and a low annual fee.

In order for your children to qualify for a credit card and to help them build credit, consider opening a joint credit card account with them. It has to be a new account as just adding your child to your existing credit card account will not help them with building credit.

If your child is moving or going to college then get a family emergency card. If there is an emergency then they will have the funds to deal with it. A family card that can only be used for emergencies only will still make them feel that they have their own card.

When you are looking at choosing a credit card for your child, allow them to do the research and discuss it with you. This will teach them the ins and outs of all the cards on offer and they should never just sign.

Get to Know Reward Credit Cards

There are some credit cards that will give you incentives for the amount of money that you spend on the card. There are all types of credit card rewards. Generally you will earn a certain number or percentage of rewards for every amount that you spend each time your credit card machine – http://creditcardmachines.co.za/

Credit Card Reward Types

There are three main categories that rewards fall into, those being cash, points and miles.

Cash rewards are the easiest. Cash reward cards don’t always mean that you get cash. There are programs that will let you exchange your cash rewards as credit to your account and others will deposit the amount into your bank account. There are some cash rewards that can be redeemed as gift cards for merchant partners of your credit card issuer.

Point rewards are based on the per dollar amount or your currency. Points can be redeemed for merchandise in the rewards programs online shopping mall or for gift cards, cash or travel.

Miles or travel reward cards will give you miles that you are able to redeem for airline tickets.

Rewards can be used for all sorts of things. You are able to use cash rewards to reduce your balance on your credit card, travel rewards can get you free trips and points can help you get presents or things for yourself.

Tiered Vs. Flat Rewards

With reward credit cards you may earn a number of rewards for every dollar that you spend or you may earn a smaller amount of rewards on the first lot of purchases that you make in year and then a larger amount of rewards once you have hit a certain threshold.