Credit Cards : Boon or Bane for Consumers?

There are different types of features in credit cards available to the customers. Some of the credit cards suit the customer’s financial situation better than others. The hard part is finding the feature that suits a customer and won’t be a burden for him in the future. Some of the features found in the credit cards are Business, Balance Transfer, Cashback, Frequent Flyer, Gold & Platinum, Low Annual Fee, Low Interest, No Annual Fee, Purchases, Rewards, and Student.
Customers who are using credit cards should make sure that they follow the guidelines provided by the banks properly. Some of the things that the customers should make sure while using the credit card balance transfer feature are mentioned here. We should make our payments on time because if we skip or miss the due date we have to pay very heavy fines or high interests. These kinds of accounts will give an introductory low or no rate period which is usually three, six, nine or twelve months. To make better use of these kinds of accounts we have to make sure when the introductory rate ends and should try to pay off majority of our debts during this period. Never use these credit cards for cash advances. These credit cards are really very helpful to pay off large amounts of accumulated debt. These cards are not good for withdrawing cash or making purchases because they always attract a higher rate of interest and it may increase our debts. So always pay attention to what the banks are advertising and do some research online to know more details about the offers. If we use the credit card balance transfers feature properly, it is the best way to reduce our debts.
Now about the No Annual Fee feature, usually there are two types of No Annual Fee credit card, one is the cards that have no annual fees till the expiry date and the second one is the card that offer the first year free as part of an introductory offer. Sometimes we need to pay membership fee for these types of cards because that card may have some add-on privileges. So it is really important to read the documents before applying so that we don’t run into any unexpected problems in the future. Usually the No Annual Fee cards are very basic cards that are not suitable for cash advances, balance transfers, and usually don’t have a rewards programme. They have higher interest rates and are therefore is more suitable for people who pay off their balance each month within the interest free days. If the customers are able to do this, they can avoid paying the credit card companies any fees or interest charges.
Next is the Low Interest, the banks charge a very low interest rates from the customers but there will be some limit on the amount of money they can spend or use for paying debts and so on. These low interest cards will not be having any interesting value added features.
Next one is the Rewards, for the customers that use their credit cards often get some value added feature free of cost like discount while booking train or flight tickets, lower interest rate or lower interest period and so on.