FOR CREDIT CARDS -- FOCUS ISSUE
\n;JP;
\nANPAc..r..
\nCredit-cards-tips<\/p>\n
Shop around before selecting the best card for you<\/p>\n
Sudibyo M. Wiradji
\nThe Jakarta Post
\nJakarta<\/p>\n
With the increasingly tight competition in the credit card
\nmarket, card issuers are vying for new consumers by making
\nvarious offers. One of the most attractive offers is the \"balance
\ntransfer\" facility.<\/p>\n
Many issuing banks offer the balance transfer facility as part
\nof their efforts to lure new credit card holders from other
\nissuers.<\/p>\n
With this facility, new credit card holders who stopped their
\nmembership in other banks and then transferred their credit
\nbalance (outstanding credit charge) from the old cards get a
\nlower interest rate, generally half the normal rate, for six
\nmonths. Besides the low interest rate, the new credit card
\nholders are also exempted from membership fees for the first
\nyear.<\/p>\n
In attempting to lure new members, credit card issuers also
\noffer many other incentives, such as free accident insurance
\ncoverage, price discounts at selected retail outlets, a grace
\nperiod of 50 days and points rewards that can be redeemed for
\nshopping vouchers or gifts.<\/p>\n
Financial experts, however, warned that good rewards are not
\nalways good for customers. There is nothing free in business.
\nRewards and prizes mean additional costs for the banks and it is
\nthe customers who have to pay for the additional burden.<\/p>\n
Selecting the best and the most reliable card is certainly not
\nan easy job. Many things should be considered.<\/p>\n
According to banking analyst Elvyn G. Massasya, before
\nagreeing to open a credit or charge card account, prospective
\nconsumers should consider such basic factors as their own
\nfinancial circumstances and more importantly the status of the
\ncredit card issuer.<\/p>\n
Financial circumstance should be considered as a cardholder is
\nobliged to pay the bill on the due date. \"A cardholder should
\nhave the ability to manage the debt,\" he said.<\/p>\n
With regard to issuers, Elvyn said, prospective consumers are
\nadvised to study several things related to the issuer, including
\nits credibility, the interest rate, grace period and benefits.<\/p>\n
According to Elvyn, the credibility of the issuer should be
\none of the priorities in choosing the most reliable and secure
\ncredit card because credible issuers have more experience in this
\narea. \"In addition to having a well established administration
\nsystem, the issuers should be backed by dedicated and
\nprofessional staff, and have set up partnerships with many
\nmerchants,\" he said, adding that having many merchants meant that
\nconsumers would have access to more shops accepting the issuer's
\ncredit card.<\/p>\n
A competitive interest rate is another consideration, he said.
\n\"A relative low rate is good but much more important is the
\nconsistency of the rate in the sense that it does not wildly
\nfluctuate so that you can anticipate how much your bill will be
\non the due date,\" he said.<\/p>\n
Elvyn said that if a consumer pays his bill promptly, then he
\nwill not have to care too much about the interest rate. \"But if
\nyou happen to be indisciplined in paying your bills, then the
\ncredit card that offer the lowest interest rate should be the
\npriority,\" he said.<\/p>\n
But, he added, \"You should be careful with a credit card that
\noffers too low an interest rate because, as has frequently
\noccurred, the low rate offer is only temporary in nature. The
\nissuer might later raise the interest rate higher than that
\noffered by their competitors without prior notice. When this
\nhappens to you, and you still have bills, you can imagine the
\nburden you will have to bear,\" he said.<\/p>\n
The grace period should also be considered. Knowing whether a
\ncard gives you a grace period is especially important if you plan
\nto pay your account in full each month. With the grace period,
\nthe card issuer may impose a finance charge from the date you use
\nyour card or from the date each transaction is posted to your
\naccount. \"The longer the grace period you have the better because
\nyou will have longer to pay the bill,\" he said.<\/p>\n
Elvyn said several issuers also offer other benefits, such as
\nfree insurance coverage. \"So, it would be advisable for you to
\nask the issuer the terms and condition that have to be met to get
\nsuch insurance benefits.<\/p>\n
Many credit card holders are also tempted to use their credit
\ncards in order to get bigger points rewards through which they
\nwill get more entry numbers for a prize draw some time the future
\ninvolving, for example, an expensive car or a big cash prize.<\/p>\n
\"Uncontrolled use of your credit card may lead you to be
\ntrapped in a huge debt spiral. Therefore, it would be wise to
\navoid using a credit card to get rewards,\" he said. \"Thus, when
\nyou choose a credit card, it would be advisable for you not to
\nmake the rewards your primary consideration,\" he said.<\/p>\n
Generally, there are three kinds of credit cards on the market
\n- Platinum, Gold, and Silver or Blue. Psychologically, gold and
\nplatinum are preferable because of the prestige factor.<\/p>\n
According to Elvyn, choosing the kind of credit card should be
\nbased on the utility of the credit card itself. \"In fact, the
\nissuers take several factors, such as an applicant's level of
\nneed and his debt repayment capability, into consideration when
\nissuing credit cards,\" he said.<\/p>\n
\"If you insist on getting a gold card, then this could get you
\nin trouble because, besides requiring a higher membership fee, a
\ngold card has a higher credit limit. With this higher limit, you
\nhave the potential to end up in huge debt because the gold card
\nis beyond your financial means,\" he said.<\/p>\n
Shopping Tips
\nKeep these tips in mind when looking for a credit or charge card.<\/p>\n
-Shop around for the plan that best fits your needs.
\n-Make sure you understand a plan's terms before you accept the
\ncard
\n-Pay bills promptly to keep finance and other charges to a
\nminimum
\n-Hold on to receipts to reconcile charges when your bill arrives.
\n-Protect your cards and account numbers to prevent unauthorized
\nuse. Draw a line on blank spaces on charge slips so the amount
\ncan't be charged. Tear up carbons.
\n-Keep a record -- in a safe place separate from your cards -- of
\nyour account numbers, expiration dates, and the phone numbers of
\neach issuer to report a loss quickly.
\n-Carry only the cards you think you'll use.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/for-credit-cards-focus-issue-1447899208",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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