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BANKING & CREDIT
BANKING & CREDIT MONEY SAVING & BUDGETING TIPS
Credit cards, and recently debit cards, have become an integral part of most people’s lives. In addition to making purchase transactions much easier, credit and debit cards have other advantages. However, for the uninformed consumer, they can have pitfalls. Here are some tips on how to keep the cost of debit and credit cards to a minimum, while maximizing the available benefits.
1. Maximize the advantages of credit cards through smart use. In addition to making purchase transactions easier than using cash or checks, there can be several other advantages to using a credit card for your purchases.
a. Credit cards provide the user an interest-
b. Unlike paying by cash or check, credit cards also provide you more leverage to
dispute a charge if your purchase is unsatisfactory due to the fault of the merchant.
For instance, assume you bought an item and received the wrong model, or the quality
was not as advertised. If the merchant does not readily agree to address the issue,
you can dispute the charge for the item with the credit card company. Since the credit
card company can either delay (or in some cases deny) payment to the vendor, depending
on the facts of the dispute, many vendors will be more motivated to fix the problem
if you used a credit card, rather than cash or check where you have less recourse.
This is particularly helpful if the purchase in question is a large-
c. Many credit cards also provide extended warranty protection for your purchases bought with the credit card. This protection will usually double the initial warranty on the item purchased up to an additional one year of warranty protection. Either call up the credit card company to see if this coverage is available and how it works, or refer to your credit card benefits guide.
d. Credit cards often will provide coverage for theft or damage to any purchases you made with the card, for up to ninety days under certain conditions. If covered, they will either repair or replace the item free of charge. Check with your credit card company.
e. Most credit cards offer coverage in case a rental car you are driving (and was rented using your credit card) is damaged or stolen. This coverage is effective if you do not purchase the collision damage waiver from the auto rental company, and is secondary to any other coverage you may have. There is generally no deductible, so even if your own insurance policy covers any damage sustained, the credit card coverage will pay for your deductible. In addition to paying claims for damage to the vehicle, the availability of this coverage saves the cost of buying the collision damage waiver from the auto rental company.
f. Usually credit cards also offer travel accident insurance and baggage delay insurance, when traveling on a common carrier such as a commercial airline, train, etc. Travel accident insurance is often $100,000 or greater.
g. And, of course, many credit cards have reward programs that offer travel points, points for merchandise, etc. and sometimes cash rebates. These cards are generally available at no additional cost versus your regular card (although sometimes there is an annual fee) although they may have higher interest rates. If you only use your card for purchases, and not borrowing, make sure you get a rewards card.
h. Another advantage of credit cards is reduced risk of loss, versus carrying cash. If you lose your wallet or purse the cash is gone. Your credit cards can be replaced by calling up your credit card company. If you report the loss right away, you may not be liable for any unauthorized use of the lost card, but in any case you cannot be held liable for any more than $50 in unauthorized charges. If only your credit card number is stolen, and not your credit card, you will not be liable for any charges you did not authorize. So keep a list of your credit card account numbers and telephone contact numbers in a safe place (not your wallet or purse) in case you need to report a lost card.
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