Why Not to Get a Credit Card for the Perks There used to be a time when getting a credit card meant choosing between the mustard yellow and red one, the navy blue and gold one or the blue one. Things have certainly changed in the credit card industry as now nearly every financial institution, major industry or retailer are now offering there own charge cards. With so many options for consumers to choose from, the task may seem overwhelming. When it comes to consumers choosing the best credit card for there needs, generally speaking it is best not to be tempted by the credit card just for the perks. If you tend to carry a higher balance and make just the minimum monthly basis, you could be losing out on a big way. Some criteria to selecting the best credit card for your needs include:
- Credit card rates: If you are one of the masses struggling with credit card debt, your monthly payments are probably going directly to the accrued interest, not the principal debt balance on a card. Finding a credit card with a low interest rate as opposed to perks can end up netting a substantial savings in cold hard cash, not in accrued trinkets.
- Annual Fees: Since credit card reform has taken effect, many credit card issuers are increasing fees associated with the privilege of holding plastic, especially for perk generating credit cards. Wasting money to secure a credit card is silly especially when there are thousands of options that will not cost you anything to secure.
- Dwindling Perks: Another way credit card issuers are fending off financial losses due to the credit card reform bill is by reducing the power of your perks. If in the past you used to get “one point for every dollar spent” expect to see the ratios change in the banks favor (i.e. one point for every three dollars spent).
- Time is Short: If you have been hoarding all your perks just waiting to hit a specific milestone (i.e. 100,000 frequent flier miles or a complete week of free hotel stay) time may not be on your side. As earning perks is getting more difficult it will take you much longer to achieve your perk goal and during the process there is a risk that your credit card issuers may change the reward tiers.
If, however, you pay off your cards on time and in full on a monthly basis, you can really reap the rewards of your credit card. Only those who meet the previous criteria would be the ones to most benefit from the perk generating credit cards.