May 04, 2010
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Becoming Credit Card Savvy, Pt.2
It's a lifestyle event.Debit cards have become more popular and lenders are offering rewards for their use. It's important to understand the difference between debit cards and credit cards in terms of fraud protection. With card fraud and identity theft now listed as the fastest growing crime, examining the fraud protection terms of all cards should be your top priority. Typically, debit cards do not offer the same protection. Most require you notify you lender within 48 hours of any fraudulent activity on your account or you become 100 percent liable for all charges. Credit card protection on the other hand typically allows 30 days or more with a liability cap of $50. Additionally, unlike credit cards, debit cards are connected to bank accounts placing these accounts at great risk of being completely drained. If you choose a debit card reward system, check your account DAILY!
Research indicate that American who use credit cards associated with reward programs spend more than cardholders who use card with no rewards. These rewards do not come without a price. Many come with higher interest rates and fewer choices whipping out any savings the consumer might have realized. You might ask if anyone really benefits from a rewards program. Consumers who pay their credit card balances off in full each month are typically the only ones who benefit. Added interest and fees will most likely end up costing consumers more than if they had purchased the reward outright.
Examining your own life style is the best way to become credit card savvy. Reports have led banks to become more aware of the growing needs of today's consumers. Lenders have begun to market cards that meet the unique needs of Americans. It is your job to do the research to determine which of these will best fit your personal lifestyle. Airline branded cards will work well for you if you fly frequently. Gas card rewards can benefit an individual who drives a great over the road. Lastly, if you carry a credit balance forward each month, seeking out the lowest interest rate is a must.