A Blog About Credit Cards

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As you probably already know, there are many credit cards out there.  The one you choose however, should reflect your lifestyle and your ideal spending amounts.  If you are looking for the best possible deal and the best company for your credit card, you’ll obviously need to look around at what you have to choose from and what works best for you.

The first thing you’ll need to decide when choosing your credit card, is why you need one in the first place.  Some people choose to get a credit card for cash flow purposes.  With a credit card, you can make purchases and buy things, leaving your paycheck or other source of income in your bank account to draw interest.  This way, your money will continue to grow while you continue to buy the things you need.  Then at the end of the month, simply pay your bill.

Others will choose to get a credit card and use it for instant cash purposes.  This way, they can use their credit card at an ATM and get instant cash, which is great for travel or going on a long and extended vacation.  If this is why you want a credit card, you should look for one that has the lowest rate possible for instant cash transactions.

With a credit card, you’ll also need to think about the payments.  You’ll need to decide if you want to pay the balance in full each month, or only the required amount.  When you select your credit card, you should look at the introductory rates, balance transfer rates, and other offers that may apply to new credit cards and new holders.  Some will offer you truly amazing deals, especially if you have good credit.

Another important area to look at when choosing your credit card is the incentives.  There are several cards out there that will give you incentives, such as reward points and even cash back with purchases that you can use towards paying back what you owe.  There are several incentives out there with credit cards, all you have to do is look around and compare.

The key area you’ll need to look at and compare is the APR (Annual Percentage Rate).  The APR is what you will pay on what you purchase when the incentive period runs out.  APR rates will vary among credit cards, so it is always in your best interest to compare and shop around.  The lower APR rate you get, the better off you’ll be.

Another concern with choosing your credit card is the minimum payment amount.  Most minimum payment balances will start around 3%, although some can be lower while others tend to be quite a bit higher.  The interest free period is a concern as well, as you will obviously want to choose the longest period that you can keep the payments down.

When you make that final decision and choose your credit card, you should always make sure that you know exactly what you are getting. Credit cards are great to have, although they can lead to a downfall if you don’t choose them carefully.  If you put some time and research into choosing your credit card, you’ll find the best one for you.  As long as you take care of your credit card and pay the bill on time, you’ll help raise your credit and eventually be able to purchase even bigger things - such as a car or even a house.

A gift credit card sounds like a lovely idea - it is just like giving cash, or a gift certificate, but unlike a gift certificate it can be used anywhere, and unlike cash, it can be sent through the post, and embossed with a personalised message. Gift credit cards are increasingly popular, but I must return to my regular due diligence refrain; when it comes to gift credit cards - make sure you read the fine print!

What is a Gift Credit Card?

A gift credit card is issued by a regular credit card company, like Visa, Mastercard, or Discover, or perhaps by a store, although strictly speaking that would be a gift store card rather than a gift credit card.

Actually, the name “gift credit card” is a bit of a misnomer, because these cards are not actually credit cards. Gift credit cards are “stored value” cards, otherwise known as “debit cards”. When you buy a gift credit card for someone, you are doing the equivalent of opening a bank account in their name and getting them a plastic card they can use to withdraw the cash.

The Benefits Of Gift Credit Cards

There are many benefits to gift credit cards, depending on the issuer. This is why it is very important to read the fine print, because you want to make sure you actually get a gift credit card with the specific benefits you are wanting.

Gift credit cards issued by Visa and Mastercard can generally be used anywhere that a regular Visa card or Mastercard could be used. This includes using gift credit cards to withdraw cash from automatic teller machines, for making online purchases, and to make purchases from merchants located overseas.

Gift credit cards can be very attractive. Most issuers offer a choice of personalisation options, including images, colors, and wording.

Gift credit cards can be sent through the mail. Most issuers will replace lost gift credit cards, subject to the usual labyrinthine terms and conditions - have I said “read the fine print” yet?

Particularly for teens, it can be very exciting having their very own credit card. Some would argue that this is not something that should be listed under “benefits”, and that getting teens excited about credit cards is the last thing we want to do.

Bear in mind, though, that gift credit cards can’t be used to spend money one doesn’t have. They are actually debit cards, which encourages the young person to keep tabs on their balance and plan their expenditure to fit within the balance available.

Some gift credit cards can be recharged with more money - this makes them a useful way to support college students living away from home, or elderly and sick relatives in need of extra medication on a regular basis.

The Problems With Gift Credit Cards

There can be problems with gift credit cards. Particularly if you haven’t - need I say it? - read the fine print.

Some gift credit cards have limited geographical range. While this limitation is often just that they can only be used within the US, there are further complications. American Express, for example, will not ship gift credit cards to the states of CT, HI, NH, RI & VT. Their reason for this, as stated on their website, is as follows:

Restrictive legislation in these five states makes it cost prohibitive for American Express to sell our Gift Cards to the residents of those states.

Compassbank feels the need to point out in its Ts & Cs that the balance on your gift card is not FDIC insured. While the others don’t necessarily come out and say it, chances are that the same restriction applies to all stored-value cards from other issuers as well. FDIC insurance covers money deposited with banks, and once it has been charged to a gift credit card, it is no longer deposited with the bank.

This is not so much of an issue if the gift card comes from an issuer who will replace a lost gift credit card - but not all of them will.

I could go an at length about the nasties that lurk in these terms and conditions, but you can read them for yourself when you research your gift credit card.

The final issue I will raise when it comes to gift credit cards is the issue of cost.

Most gift credit card providers charge quite hefty fees. They will charge a fee to issue the card, a shipping and handling fee, a fee to replace a lost or stolen gift credit card, and many of them will also start charging a monthly fee if the money is not spent within a few months of the gift credit card being issued.

Make sure you read the terms and conditions carefully when you buy or are given a gift credit card, to find out what the hidden fees and charges might be.

Gift Credit Cards - The Bottom Line

I don’t want to put you off from making use of gift credit cards with all this doom and gloom about terms and conditions, problems, fees and possible losses.

A gift credit card is a perfectly useful financial tool. It is a gift which will delight a certain demographic, and is both practical and effective for a range of circumstances where cash is problematic. like any other financial product, a gift credit card requires that you pay close attention to the fine print, to make sure you are buying the most appropriate gift credit card for your particular situation.