Sunday, May 15, 2011

Pick a card but not just any card


With the economy on a slow and gradual path to recovery, people are starting to spend money again while banks are starting to lend it again as well. If I had to pick one lesson that the economic crisis has taught me, it would have to be debt management. When times got tough, people from all walks of life opted to forego the use of their favorite credit cards in favor of using the more prudent and disciplined option of debit cards for making day to day purchases. Allowing consumers to have better control of what they bought with the cash mentality of “if you can’t afford it now then you shouldn’t be buying it”.

Now that people are starting to show a little more confidence in the economy, credit card companies are offering a lot more products and programs designed to attract a savvier consumer. With all the funny and witty credit card commercials and advertisements that we are constantly bombarded with, deciding which credit card is best for you can be pretty confusing. The first thing one should think of before applying for a new credit card is- what is your primary objective? Are you looking for a card with a low balance transfer rate, which will allow you to pay off some debt quicker or are you looking for rewards or travel miles? Whatever the case maybe, credit, when used correctly can be a wonderful thing. You can earn miles and points, which can lead to discounted hotel stays and free airline tickets. Credit can even bail you out of emergency car repairs and buy you time in between paychecks. Here are three cards worth looking into:

1. The Chase Slate/ Mastercard with BluePrint (13.24% to 22.24% variable) with no annual fees- Perfect for those who want to make a balance transfer and are serious about paying it off- Chase Slate with BluePrint provides cardholders with very attractive rates (0% for 12 months and depending on your FICO score you can qualify for a fixed rate of under 6% for the duration of the balance transferred). The BluePrint feature lets you choose which purchases to pay off in full each month, enabling you to reduce interest charges and eliminate that balance faster. I actually have this card and use it specifically to pay off the only debt obligation I have left. Ever since Chase took over the now defunct Washington Mutual, the Chase Slate Credit Card has become a very convenient option for those who bank with Chase as well. Offering its customers a one stop shop so to speak, with all inclusive online access allowing you to move funds around from your checking account to your credit card with ease and the luxury of actually speaking to a human about your credit card account at any Chase branch.
Cons: The one downside: a 3% transfer fee with no cap.

2. The Capital One Venture Card- (has a variable 13.9 percent APR. There is also a no-fee version of the card—the Capital One VentureOne Credit Card—which offers similar benefits but pays only 1.25 miles rewards per dollar spent). Their commercials of displaced Vikings tooling around urban streets asking us "what's in your wallet" are pretty funny, but it turns out that their cards are pretty good too. Their claim of “no hassle” rewards seems to live up to its name. This card is ideal for those who have travel as their number one objective. The Venture Card offers double points on certain purchases such as gas and groceries allowing users to quickly rack up the points with everyday purchases garnering 2 points for every dollar spent.
Cons: Capital One ranks among the worst cards when it comes to customer service and has a $59 annual fee after your first year.

3. The American Express Charge Card –which is available in Green, Gold, Platinum and Black each color coming with various degrees of “Pomp and Circumstance” along with annual fees in the same ascending order. An American Express Charge Card is perfect for someone who wants to earn points and miles while keeping a firm grasp on their spending, since you have to pay off your balance in full every month. Each card has an option to enroll in their Membership Rewards Program which offers one point or mile for every dollar spent and occasionally offers double points if you use your card to pay for certain bills like your cell phone bill and other utilities.

I have been an American Express Card member off and on for the better part of my adult life and the fact that I have to pay off my balance in full each and every month is the very reason why I have been such a loyal customer. I use my Amex Green in combination with my debit card and Chase Slate card as my would be formula for disciplined spending with benefits. American Express has unparalleled customer service which can come in handy when planning trips and traveling abroad. Anytime you use an American Express card to purchase plane tickets you automatically get travel insurance for lost or stolen luggage and covers emergency trip cancellation.

A perfect example of such insurance coming to good use occurred when I, along with some of my closest friends took a trip to Costa Rica a few years ago. I used my Amex to rent an all-wheel drive SUV which at the time was a necessity to handle the country’s rough unpaved roads. By the time we returned the vehicle there was around $500 worth of damage on our rented Mitsubishi Montero which Amex paid for.

Cons: Not everyone accepts American Express, annual fees ranging from $90 all the way to several thousand per year depending on which color you opt for.

2 comments:

  1. thank you for this perfect timing post! i was paying my bills yesterday and realized that about $20 of the $150/month was going to actually paying off my debt on my capital one card...ridiculous! it's time i take charge of my charges!

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  2. Glad I can help Joyce- you should really consider doing a balance transfer on that particular card - not only will you save money but you can get that balance paid off much faster!

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