September 25, 2009
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Credit Card Ground Rules, Pt.3
The good with the bad.Insurance: We get free theft insurance, purchase insurance and financial insurance from credit cards. All rolled into one, we're far more protected from theft with credit cards than carrying cash of using debit cards. We're far more protected from deals gone sour for the same reason. Once a merchant has your money, they now carry a major advantage in a dispute. Forget about ever seeing that cash again. The best you can hope to do is to transfer it to an expensive attorney. With credit cards, not so. In most cases, you can stop the deal cold and put control of those moneys before a fair arbitrator.
Credit Equity: The more we use our credit cards responsibly, the more trust we build with loan agencies. Car loans, mortgages and even better credit card terms. We can save thousands of dollars that way. It's really a great deal. We also put ourselves on a better plain when it comes to securing better credit card terms with a good credit rating. We find ourselves in a much better bargaining position when we can call our lender and explain with credibility that we really would prefer to stay with them but, we may have to exercise our ability to shop around elsewhere.
Caveats: All these nice things are not a given, however. In order to enjoy all these nice things we are required to act responsibly. It's been said in part that "poor people have 'poor ways'". This means, of course, that some of us create our own problems as we go. This is especially true with credit cards. The following warnings are some of the most common pitfalls which we must avoid in order to not cause ourselves to be poor. Again, these may be considered common sense but, as we look around, we realize that this sense is not common to a lot of people.