Best Credit Cards with Rewards

credit card, friend or foe?

A CREDIT CARD can be a good friend or your worst enemy. These grave mistakes will turn your credit card into your worst foe.

1. Not staying on top of interest paid
Most consumers are attracted by credit cards that have rewards like free miles or cash rebates. That’s fine as long as you pay off monthly balances in full. But if you’re what industry insiders call a revolver—paying just a portion of your balance—you’ll be easily hurt by interest charges. So, shop around for the best rates.

Also, check the annual percentage rate (APR) and not just the nominal rate. Figure out how interest is computed. Is it a straight computation based on your outstanding balance? Or is it based on your average daily balance? The formula can also be based on a shorter number of days, instead of a full 30 days.

2. Paying only the minimum
Pay in full. If you find yourself paying just the minimum every month, you’re spending more than you can afford. You’ll be slapped with hefty finance charges. A 20-year old with a P100,000 balance on his credit card, a 3.5% monthly interest rate and a 5.0% minimum payment, will still have debt when he retires at 65 if he pays only the minimum.

Now, if you have no choice but to pay the minimum, stagger your payments weekly and not pay the lump sum on the due date. This is because for many credit cards, finance charges are computed on an average daily balance. So with declining balances over the credit cycle, the average daily balance—and the interest charge—gets lower.

More importantly, cut back on your expenses. Manuel “Chut” Santiago, Jr., General Manager of UnionBank Card Center, says, “Credit card spending should be part of an overall spending plan. Cardholders should not spend more than what they can quickly repay.”

If your spending gets out of control, ask for a lower credit limit, or if things get worse, cut your card and pay in cash. Cecille Fonacier, Citibank Marketing Director, explains, “A credit card is a very convenient tool to have, if used responsibly. Remember that credit cards give you spending power, but not more money.”

3. Paying late
Pay your balances on time, every time. Even if you can only afford to pay the minimum, pay it on time. Late payments are costly as you’ll have to pay a late penalty fee of around 6% and a finance charge of 3.5% every month. Chut says, “Paying late or missing payments can quickly ruin your credit as well as increase the cost of maintaining the card.”

Now, if you miss a payment once in a while, ask to have your penalty fee waived. If you’ve been an overall good cardholder, you’ll get your wish granted. Remember, it never hurts to ask.

Source: Inquirer.net

luxury credit cards

The most exclusive credit card in the world is the American Express Centurion card, otherwise known as the “Amex Black Card,” which is known for its elitist standing of mythical proportions.

The article, features the next best thing: three exclusive credit cards that provide comparable services, but don’t require spending $250,000 a year, like the Amex Black.

1. Citibank Ultima Card. Although this card is for the wealthy and elite, it costs far less annually to own this card ($1200 a year, rather than the $2500 annual fee for the Amex Black Card), putting it within reach of most upper-class households. A comparable card for folks with a more modest salary is the Citi Premier Bonus Pass Card, Elite Level.

2. American Express Platinum offers $500,000 travel insurance, not to mention domestic and international companion tickets, bag insurance, car rental privilege, club access, and many other benefits. Also, the Amex Platinum card offers a “global assistance hotline,” which is there to save you from “medical, legal, financial and other” emergencies, 24/7. At $450 a year, it is a much less costly way to own the prestige and perks of a luxury credit card.

3. Bank of America Accolades Card prides itself on perks like companion tickets, priority passes in airports, and access to members-only airport lounges. All these features, which easily match the more famous competitor, are offered for a $295 annual fee, rather than the $2500 Amex Black Card.

*Read the complete review here.