It used to be that money was the root of all evil, but credit cards have now surpassed the greenback as the most sinister form of payment in the U.S to some. The reason for this changing of the guard is quite simple; irresponsible consumers are running up huge amounts of credit card debt and not paying it back. It's a shame because in favorable hands credit cards are a fantastic way to establish credit.
Some of the major players in the credit card industry today are:
- American Express
- Capital One
- Visa
- MasterCard
American Express runs the Are You A Cardmember campaign with Tina Fey as their latest celebrity addition. Fey joins tennis great John McEnroe on this current ad blitz. Priceless is synonymous with Peyton Manning and MasterCard. You may recall his, "Cut that meat," quote in one hilarious spot. Visa is the proud owner of It's everywhere you want to go. The six degrees of Kevin Bacon ad was certainly noteworthy. And Capital One, minus the celebrity star power, owns the copyright to What's in your wallet? These campaigns are designed to showcase the value of membership and its array of special benefits and services while distinguishing themselves from their counterparts. But which one's right for you?
Mark Marquis of the Student Loan Network educates thousands of students and credit card hopefuls each year about what to look for. According to Marquis many consumers still hold their first credit card which isn't necessarily a good thing. "A lot of students snagged a credit card during their college careers, which was great in a pinch," says Marquis, "but the interest rate probably leaves much to be desired." Rule number one, shop around. Not all companies require a credit score resembling that of Barry Bonds career homerun mark (762) to get a good rate.
You should also be wary of giveaways. Common practices used to lure students to sign-up for high interest rate credit cards are free merchandise; although that's actually how I landed my first card. I got a free t-shirt for my John Hancock. I also got (gulp) a 22.9% APR too. Thank god I read the fine print. I was mindful of the balance I kept. Truthfully I was just excited to have the plastic. My friends who applied with me were turned down, but not me. Now I could order 65 large pizza's from Domino's on a Friday night (I wonder if they could do that in 30 minutes or less) with my $500 credit line. I was the big man on campus and loved the fact I had my visa.
Still, there is a camp of people in the U.S. who think credit cards are evil, Marquis says. They think spending money that you don't have on hand is an inappropriate financial practice and cash/checks should be strictly used at all times. The reality is there are a number of legitimate reasons to pack at least one card in your wallet.
Five reasons you should hold a credit card are as follows:
- it's an easy way to build credit,
- you can earn rewards points,
- great for emergency situations,
- most offer credit card checks at lower fixed interest rates,
- and cash advance availability.
It's true that in the wrong hands credit cards can be an addictive evil, but so can just about anything in this world. As long as you are disciplined and can exercise restraint I would advise applying for one. Credit cards, as we've learned, can serve as an excellent gateway to a stable credit future. Barbie may wear her plastic well, but your plastic is far more valuable.
Source: Associated Content