Tuesday, January 15, 2013

Choose Your credit cards

Credit cards no longer serve only to make purchases: using them, it now gets free travel, gifts, cash-back... Avenues to find and choose the card that suits our needs.

Things have changed since the appearance of the first credit cards, to the United States, in the early 1950s. At the time, these pieces of cardboard only allowed to eat in restaurants members of Diners Club. Today, there are more than 200 credit cards available in Canada, according to the Agency's financial consumer of Canada (RAC), a federal regulatory agency. According to the Association of bankers (ABC), over a million shops at the Canada accept Visa or MasterCard. And Canadians have nearly 70 million credit cards in their collective portfolio!

They share all some characteristics: they offer a grace period, i.e. a period (between the purchase date and the expiry date of the statement) during which no interest is charged. They claim all the interest to customers who do not pay their balance on the due date. Finally, they all require a minimum monthly payment.

Choose Your credit cards
Choose Your credit cards
That said, according to the maps, the grace period extends from 17 to 26 days, the interest rate ranged from 9.9% to 28.8%, and the required minimum payment is 2% to 3% of the balance. The benefits also vary from one card to the other: annual leave, travel insurance, discounts in some shops, discounts on flights, cruises or investment products! Find one that meets our needs requires a good effort of shopping.

The main mistake we can do by taking a credit card? Not the shop. The second? Ill know its conditions of use. Indeed, like a loan mortgage, "credit cards are a financial product which one WINS to understand how to avoid unpleasant surprises," said Véronique Milot, communications officer to FCAC.

For example, the interest rates of some cards on balance transfers is only 1.9%. But it is valid only for a few months, and often, it does not apply to new purchases. Better to know before subscribing to this type of card. Similarly, it can be that some benefits or insurance is available with the card, but at an additional cost. In short, it has interest to ask questions and read the passages in small print, or at least to have them explain. Here are the features to check before choosing a credit card.