Fee’s are not the Only Thing to Consider with Credit Cards
The use of the credit card is still becoming an increasingly important payment payment method despite it having been around for a generation. Although most transactions are still operated in cash the percentage of credit card transactions compared to cash transactions increases each year and in the foreseeable future will overtake cash payments.
Anyone who is considering making the decision to apply for a credit card should first make sure that they are properly informed of all the details of what is involved with that particular credit card. There are now so many credit cards offer that you can quickly lose sight of exactly what you are signing up for.
For this reason you should always try to make a comparison of all the credit cards that may be available to you in your circumstances. This is a far better option than just blindly accepting the first card company that accepts your application.
The fact is that many credit cards carry annual fees and a multitude of other so-called hidden fees linked to all kinds of provisions and stipulations. Depending on the credit card and credit card company you can be unaware of these charges until it is too late. These fees can easily be circumvented by making use of one of the many credit card comparison sites on the Internet.
Some people might argue that undertaking a credit card comparison automatically excludes credit cards falling under the premium card segment. That is true if you only want a credit card without any up-front fees.
However, initial fees should always not be considered entirely bad, because if you make use of a gold or platinum credit card they ultimately can offer some considerable benefits that are easily capable of outweighing their initial fee.
A premium credit card can offer certain advantages and opportunities such as all kinds of free or extremely cheap insurance coverage. Some will offer other benefits such as free concierge service anywhere in the world.
Some premium cards offer all kinds of telephone services free of charge that are capable of assisting clients with all manner of problems all around the world. For example if you are on holiday in Venezuela and you fall sick in the middle of the night you can call your premium card company and they can arrange for an English speaking doctor to visit your hotel. You have to consider just how much such services could be worth over the course of a year.
Premium card services and also offer other helpful initiatives such as a hotel booking service or privileged ticketing at a Broadway show for a big pop concert in London.
These sorts of advantages are why you should just not look at fees when considering applying for credit card. Interest rates and other charges are important but you should also consider what advantages to certain cards may give over others. And if you were to make a lot of use of these services could save you a huge amount of money, time and inconvenience over the course of the 12 month contract.
Do I Need to Pay an Annual Fee For a credit Card?
It is not surprising that more people increasingly are turning to the credit card for it is convenience of payment. The application for a credit card is simple and it is mostly concerned with your basic financial status such as do you own a house or rent, your level of income and your credit record.
Many card companies now offer highly convenient application forms on their websites that can very quickly tell you if your initial application has been accepted and if you will be entitled to receive a credit card and what their terms will be.
It is absolutely not necessary to pay the fees that many credit card companies request to open an account. There are many other banks and financial institutions that will offer credit cards free of initial charge.
Now some people may perhaps think that it is not so simple to find credit cards, which are offered free of initial charges, but this is not the case. There are many financial outlets that offer credit cards without a set up fee as well as all online and direct banking facilities that offer cards that are application fee free. Consequently, it requires only a brief online comparison to find the best credit card offers available.
Some people might argue that the cards that are offered free of charge are not as useful as premium credit cards that charge an initial fee. This may certainly true, but at the same time the question arises as to whether you have a need for the services that premium credit cards apply in return for the annual fee.
In most cases it is the people who spend a large amount of time travelling or who make larger frequent purchases with a credit card that feel the most benefit from the additional services offered by fee based cards.
If you do not need additional items such as travel insurance, life insurance and concierge services offered by these cards there really is no need to pay any more in the from fees to obtain a new credit card.
For the vast majority of credit card holders, a free card is the most suitable as most of their purchases are smaller and are made close to home perhaps at the supermarket or department store or possibly to play for a gift that they have purchased via the Internet.
In this case it is far better to approach your own bank or another financial institution to make an application for a card that carries no annual fees. Don't forget that an annual fee simply adds to the amount that you are paying each year just like interest.
Using Your Credit Card Because You “Deserve it”
During past difficult financial times, many people have turned to their credit card to see them through difficult days. It is easy to see why many individuals will opt to use their credit card if they find themselves in a difficult financial corner.
With an already agreed spending limit, there is no need to apply to anyone for a loan. A credit card holder can simply whip out their card and make an instant purchase without having to consult their bank or anybody else for a quick cash loan.
Unfortunately, the reality of the situation may be that people should actually be cutting back on credit card usage, or at least using them far more wisely. When we make use of our credit card because we don't have the cash, we all push to the back of our minds the fact that at some point the card does have to be repaid.
In hard times the more, we use the card the more has to be repaid and the more huge interest can build up. We all tend to blame external factors that we have no control over. It is the governments fault, the mortgage companies fault, or the stock market's fault that we are in this situation therefore we are not to blame and we have no choice but to use our credit cards.
This of course sidesteps the issue that the stock market or the government is not going to pay off your credit card debts, you will be the one responsible for them and the large amount of interest that the card companies will add on especially if you opt to only make the minimum payment each month.
There is a strange phenomenon that in hard time’s people want to cut back on all kinds of basic necessities and luxuries, but curiously, the psychological urge to splash out becomes far more prevalent when times are hard.
The HSBC recently conducted a survey that showed that in the previous four weeks 42% of those questioned said they had made purchases that were completely frivolous and self indulgent without regard to repayment.
Additionally when asked for their reasons a full 28% said the reason they had splurged on unnecessary spending was because they “deserved it” which is a curious reaction when most people around the country are worried about unemployment and their mortgage payments.
“Deserving” or “needing” something is a common psychological excuse for outlandish credit card spending that cannot be rationalised away.
That is why perhaps another near 50% of those surveyed said the reason they had spent inappropriately was because it "just feels good". If we continue to use our credit cards as some kind of drug fix that makes us feel better in the short term, in the long term the withdrawal effects could be very distressing indeed. |
