Your credit card rewards options are almost endless. Get a co-branded card offered in partnership with a hotel chain, clothing retailer or even a nonprofit organization like AARP and you can leverage your everyday spending to earn valuable rewards day in and day out. The trick is to find the card that best fits with your spending patterns. Doing the inverse—altering your spending patterns to fit with a particular card—can be counterproductive. But if you’re already spending money on a regular basis with a certain retailer or have an affinity for a certain hotel, why not use the card that will encourage your continued patronage by offering you enhanced rewards, discounts and perks?
Cardholders generally earn miles at a rate of one mile per dollar in net purchases, or sometimes one mile per two dollars spent for lower-end card options that have no annual fee. How valuable this reward actually is depends on the type of airline ticket you purchase with your points or miles. Many frequent flyer cards are made immensely more valuable by their mileage-based introductory bonuses. These are often enough to put you 50–100% of the way toward an award flight after meeting the initial spending requirement involved.
By contrast, when your credit card is used fraudulently, you aren’t out any money—you just notify your credit card company of the fraud and don’t pay for the transactions you didn’t make while the credit card company resolves the matter.
Credit card networks like Visa and Mastercard provide zero liability coverage for unauthorized purchases as a way to encourage usage of their card over cash and check.
Credit card companies can also help resolve refund issues when consumers are unable to resolve merchant disputes on their own.
You draw upon your savings account and write a check. But what do you do when, 72 hours later, the tile starts to shift and the grout still hasn’t set? Your entryway is now a complete mess, and that vein in your forehead won’t stop throbbing.
You can take up the issue with your state licensing board, but that process could take months and the contractor still has your money. That’s why, if you can, you should pay for a big-ticket item like this with a credit card. The issuer has an incentive to discourage fraud among its vendors, and if there is a problem, they have a mechanism to try to resolve it. More important, if you dispute the charge, the card issuer withholds the funds from the tile setter, and not only will you get your money back, you might even get help finding a new contractor.
Hanging on to your funds for this extra time can be helpful in two ways. First, the time value of money, however infinitesimal, will save you money. Delaying eventual payment makes your purchase a tiny bit cheaper than it would be otherwise. Beyond that, your cash will spend more time in your bank account, and if you pay your credit card from an interest-bearing checking account and earn on your money during the grace period, the extra will eventually add up to a meaningful amount. vs. paying with a debit card, cash or check.
Second, when you consistently pay with a credit card you don’t have to watch your bank account balance as closely.
So, if you want to pay for one of these items with a debit card, the company may insist on putting a hold of several hundred dollars on your account. Also, when you’re traveling in a foreign country, merchants won’t always accept your debit card—even when it has a major bank logo on it.
Original Article Source Link: