Credit Cards

Credit Card Introduction Guide and FAQ

Welcome to the Credit Card Introduction Guide and FAQ. Look here for any questions you might have regarding credit cards. All answers are very brief, but should point you in the right direction for any concerns regarding credit cards.

If there’s still questions unanswered, feel free to leave them in the comments below. I will do my best to answer them.

1. Are credit cards bad?

2. Why should I own a credit card?

3. What are the potential sign-up bonuses?

4. Should I ever cancel a credit card?

5. How much will canceling a credit card hurt my credit score?

6. What is the best way for me too meet my minimum spending requirement for a sign-up bonus?

7. How do I avoid paying for a credit card annual fee?

8. Is there a way to get my interest rate lowered?

9. What is the best way to check my credit score?

1. Are credit cards safe?

Many people worry about owning a credit card because of the potential to get in debt with high-interest. The fact of the matter is that credit cards are one of the more safer ways to make a purchase. If you lose your card, they’re easy to cancel.

If your credit card is stolen and someone else makes a purchase, it’s easy to file for what’s called a chargeback in which you can get 100% of your money back. With a debit card, it might not be impossible to do this.

Furthermore, credit cards offer some of the best rewards and benefits you can get simply spending your money. This includes cash back, frequent flyer miles, free auto collision insurance and more.

2. Why should I own a credit card?

Credit cards offer some of the best rewards you can get for simply spending money. This includes cash back, frequent flyer miles, hotel points and much more.

Furthermore, there are a lot of benefits that people don’t know about with almost every credit card. This includes but is not limited to free auto-collision insurance on car rentals and free extended warranties.

3. What are the potential sign-up bonuses per credit card?

Sign-up bonuses vary per credit card. The best that I have seen include up to $600 dollars in cash or around 100,000 in miles. Usually the higher-end offers are only available for a short time, so it’s a great idea to act fast.

I would say on average it’ not hard to find a card that at least gives you $100 in either cash or airline miles. If you’re stuck on how to find a credit card, check out my for a list of credit cards that fit what you’re looking for.

4. Should I ever cancel a credit card?

Canceling a credit card just to cancel a credit card is never a good idea. It can potentially hurt your credit score. The only time I personally recommend canceling is when you cannot waive the credit card’s annual fee.

5. How much will canceling a credit card hurt my credit score?

This depends on the person, but usually it’s no more than a few points at most. I don’t cancel my credit card very often due to this factor. The most it has ever gone down is by 5 points.

6. What is the best way to meet my minimum spending requirement for sign-up bonuses?

When you sign up for a credit card, sometimes there’s a sign-up bonus involved. These bonuses require you to usually spend a short amount in a short time, giving you thousands and miles of points in return.

In order to meet this requirement, the best way is obviously to use the card for everything you can within those 3 months. If that isn’t enough, use Amazon Payments. Amazon Payments allows you to transfer up to $1,000 per month as a “gift” to anyone without any fees.

Use Amazon Payments to transfer money with your credit card to a friend or family member and have them give you the money back. Do this for three months and you’ve easily hit $3,000. I don’t recommend doing this too often, as Amazon can close your account if they catch on. Furthermore, sending more than $10,000 in gifts per calendar year may result in you have to pay taxes.

7. Is there a way to get my interest rate lowered?

If you’ve already applied for a credit card and don’t want to apply for another one with a lower rate, there is a way to get your current APR lower. Simply call the credit card company and ask. Usually they’ll be more than willing to at least bring it down a little bit to keep you as a customer.

8. What is the best way to check my credit card score?

By law, everyone is required to one free credit report per year by the three major credit card bureaus (Equifax, Experian, Trans Union). A good website to get these reports is www.annualcreditreport.com.

Please leave me any unanswered questions in the comments below. Thanks!

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