Credit cards offering rewards miles and other incentives may seem like a good deal, but let’s look at the fine print to learn more.
With the recent CARD Act going into effect on February 21, 2010, consumers are now receiving additional protections when it comes to how the credit card companies can charge interest, late fees, and those roving due dates. See my previous post ( http://attorneygaudreau.wordpress.com/2009/08/21/watch-out-for-…dit-card-rates/) for all of the details and the rollout schedule for effective dates. By examining your credit cards and store charge cards, you’ll be better able to regain control over your finance charges and make better buying decisions.
According to a recent report by Mellody Hobson, Good Morning America/ABC News Financial Correspondent, there are several steps consumers can take to better understand the credit card agreements they have and find better paying reward programs.
1. Charge Card versus Credit cards – It’s always better to carry a charge card if you can. With charge cards, you can’t carry a balance or spend more than you can afford because balances must be paid off monthly. The most recommended card is the American Express Green Card, not the platinum or blue card, but the original green card. Holders receive points for purchases. The green card has an annual fee ($95 annually) but is a good deal for the convenience of a reputable charge card.
2. Miles by Discover – The Miles by Discover card offers holders one airline mile per $1 pent. The annual percentage rate (APR) starts at 11.99% and there are no blackout travel dates.
3. Capital One Visa – No Hassles Miles Card. Card holders receive one mile for every $1 spent up to $1,000 per month. The caveat here is that you don’t want to spend excessively just to get the points. Having a rewards card should be just that, a reward for purchases you would ordinarily make, not excessive spending. There are no black out dates to redeem the miles and they don’t expire. The card requires no annual fee, but percentage rate starts at 13.99%.
4. Chase Sapphire Card – Card holders receive one point for every $1 spent. It’s an easy process to redeem points for actual purchases.
These are just a few of the best reward cards available today. The best advice we can give is to research your charge and credit card options and fully understand the fine print before you sign on the dotted line.