4 Credit card Features you should not Use | Use credit card wisely
It’s obvious that most credit cards features come with lots of benefits. Good perks that will help you save more money. Some of the benefits include reward points that you can redeem for cash or products, car return insurance and other card security features.
But despite all the benefits and perks that most credit cards offer, some of the rewards and perks come with some hidden charges that can threaten your budget. It might event because you more harm the profits that you think of.
In this post, I’ll review 4 of such credit card features that you should avoid.
ATM Cash Advances
You shouldn’t use your credit card to make withdrawals from the ATM. It isn’t a good idea to make withdrawals using your credit card. Most credit card issuers charge more for using the credit card to withdraw from the ATM than they charge for convenience checks.
Your card issuers can charge you 3% for a convenience check on cash advance transaction. But if it’s a transaction with your Credit card on the ATM, they may charge you as high as 5%. This means that you’ll pay higher cash advance APR if you borrowed the Money. So, withdrawing cash as low as $20 may attract a higher charge. Imagine that you’re charged 5% for withdrawing $20.
Credit card Convenience Checks
Though blank checks from your credit card may be appealing, mostly when it comes with some substantial rates. I advise you look twice before you start using them. For example, after using the credit card to make bill payments in the bank, you may end up paying cash advance APR of 25 or 35 percent. In the same vein, you may be charged transaction fee as well. Also, transferring a balance from one card to another with checks attracts interest fee. And the balance transfer fee can be as high as 3 or 5 percent.
Interest-Free Balance Transfers
Well, it’s good to have a free interest balance transfer card. Though it’ll help you if you’ve lots of debt it can help you pay off. But you must bear in mind that the balance transfer will must time charge you a fee as high as 4 to 5 percent. All these, you’ll continue paying for a whole lot of time. This will hold you down trying to pay for the charges while the balance remains.
It’s not a good idea going for a credit card that offers no initial balance transfer fee but gives promotions that may affect you in future.
The Merchandise and Gift Card Rewards
Most people often go for a credit card features that include merchandise and gift card rewards. They go for it without checking if they can use the points for a reward that has a higher redemption value. Most of the merchandise and gift cards offer lower redemption values than some card rewards like the travel cash-back but it depends more on your credit card issuer, some 50,000 rewards points can buy $350 gift cards or more.
So, if you make the right choice today, it’ll determine what you’ll get out of it.