Simply put, a credit card rebate is a cash reward a credit card company gives you for using their card. In terms of how the card actually works, the company that issues the rebate credit card charges the vendor from whom you make the purchase. You make the purchase from that vendor because you are getting cash back through your rebate credit card. The credit card company shares its earnings from vendor tie-ups with you, and thus attracts more customers. So everyone benefits.
Types of Rebate Credit Cards
There are a number of different rebate credit cards that cater to different types of people. The credit card rebate that works for Jack may not work for Jill. Or in starker terms, one mans meat is another mans poison. Some rebate credit cards are tailored for businessmen. Some credit cards give very high rebates up to 5% through certain programs. If you find that you fit into that program, and the purchases you normally make are in line with those offered by that program, you stand to save a lot of money
Again if you are a doting mother who just cant get enough toys for her kids, you can find a credit card that gives you rebates every time you do that. A certain rebate credit card would be perfect for someone who couriers frequently. Such a person should find a credit card that gives him rebates on payments to a courier company.
Some rebate credit cards can give you up to 10% in credit card rebates on certain purchases for a specified period. If you fit in there, you stand to save a bundle!
But how do you find the card that fits in with your needs? The Internet is a good place to start with some of the best rebate credit cards available with a few clicks of the mouse. A little homework can save you money where you never imagined it could.
Credit card rebates offer an advantage to frequent flier miles. You can use the rebates as you want. The rebate credit card can also be an important money management tool which will benefit you for years to come. To benefit the most, take your long term needs into account when choosing your rebate credit card. Be specific to your financial needs. If necessary you can even use two rebate credit cards to take advantage of two bundles of offerings.
Check the Details
Always remember to check for the APR offered by the credit card, as well as the annual fee. There are numerous offers available for rebate credit cards at 0% APR for 12 months and no annual fee for clients with very good credit. Also read the fine print, including the method of calculation. Some methods of calculation prove more expensive at the same interest rate. Remember, your rebate credit card is a tool to use your money wisely. By first choosing the correct tool and then using it well, you can save hundreds and sometimes thousands of pounds in credit card rebates.
Whats the thing that is most prominent on any credit card ad? Well, its the credit card rate (or the APR, as we know it). The credit card rate is the most publicized thing in the world of credit cards.
A lot of people just compare the credit card rate of various credit cards and just go for the one that is offering the lowest credit card rate (or APR). Credit card rates are, in fact, one of the most important factors in the selection of a credit card (though not the only factor). Therefore, a proper understanding of credit card rates is even more necessary.
So, what is a credit card rate or APR? Very simply, credit card rate is the rate of interest that the credit card supplier will charge you with on the amount you owe them. The credit card supplier will charge you an interest only if you dont make full payments in time.
Annual percentage rate (APR) is an expression of the effective interest rate that the borrower will pay on a loan, taking into account one-time fees and standardizing the way the rate is expressed. In other words the APR is the total cost of credit to the consumer, expressed as an annual percentage of the amount of credit granted. APR is intended to make it easier to compare lenders and loan options.
When you receive your credit card bill, it specifies the full amount you owe the credit card supplier. It also specifies the minimum payment that you must make (by a particular date), in order to avoid incurring a late fee and other inconvenience. You have the option of making either a full payment or just the minimum payment. If you make a full payment (by the due date), you are not charged any interest.
However, if you decide to go with the minimum payment or some amount that is lesser than the full amount, the credit card supplier will charge interest based on the credit card rate and the balance amount. This credit card rate is the interest rate that you agreed with them at the time of applying for the credit card. The credit card rate or the annual percentage rate, as is obvious, is an annual interest rate.
The credit card suppliers use this annual credit card rate to calculate the monthly credit card rate and then they calculate the interest on the balance amount that you owe them.
The balance amount here is simply = Full amount (payment made by you). This interest is added to your balance for the next month (at the time of next billing cycle). If you again make a partial payment, the new balance is calculated again and the credit card rate (monthly one) applied to it for calculation of new interest; and it keeps going on and on until you make the full payment.
Thats how credit card rate acts in this vicious circle. So, credit card rate is termed as the most important consideration in choosing a credit card.
There are a number of factors that will effect the credit card rates you will be offered by credit card providers. Credit card providers never offer the same credit card interest rate to all of their customers, but using complex calculations of risk assessment and credit worthiness, they set a number of different rate bands, and then place each applicant for credit in the appropriate rate band depending on the factors they used. The main method they use to assess the rate they wish to place you at is your credit score. This is a rating calculated by credit reference companies and is based on factors such as:
Your Income
The length of time youve held your job
The length of time youve lived at your present address
The value of your home
Whether you own or rent your home
The amount you currently owe
Whether or not you pay your bills on time and in full.
There are other factors too that will be taken into account. These will all be added up to paint an overall picture of you and your financial habits and health. If this score is then deemed to be good, you will fall into one of the lenders low risk bands and will be offered credit on favourable terms and with lower rates of interest. If your score is low you will be offered a less favourable credit card rate or may be denied credit completely. Therefore it is important that you try to maintain a healthy credit rating if you wish to be offered the best credit card rates possible.
Every time you apply for credit your credit score will be used in this way, so it is a good idea to check your report and make sure it is accurate and that there are no mistakes on it that could make it more difficult for you to receive credit on favourable terms and at good rates. If you wish to view your report, you can contact the reporting company and they will send you a free copy of the report. You can receive one free copy of your report from each reporting company per year. This should be enough as it is unwise to request your credit report too often. This is because every time someone views your report, this is recorded and too many views may indicate to lenders that you are desperately seeking credit from a variety of sources.
How long is the grace period?
The grace period is the number of days you have to pay your bill in full without triggering a finance charge. For example, the credit card company may say that you have 25 days from the statement date, provided you paid your previous balance in full by the due date. The statement date is given on the bill.
The grace period usually applies only to new purchases. Most credit cards do not give a grace period for cash advances and balance transfers. Instead, interest charges start right away.
If you carried over any part of your balance from the preceding month, you may not have a grace period for new purchases. Instead, you may be charged interest as soon as you make a purchase (in addition to being charged interest on the earlier balance you have not paid off). Look on the credit card application for information about the method of computing the balance for purchases to see if new purchases are included or excluded. Information on methods of computing the balance is in the section How is the finance charge calculated?
How is the finance charge calculated?
The finance charge is the pound amount you pay to use credit. The amount depends in part on your outstanding balance and the APR.
Credit card companies use one of several methods to calculate the outstanding balance. The method can make a big difference in the finance charge youll pay. Your outstanding balance may be calculated
Over one billing cycle or two,
Using the adjusted balance, the average daily balance, or the previous balance, and
Including or excluding new purchases in the balance.
Depending on the balance you carry and the timing of your purchases and payments, youll usually have a lower finance charge with one-cycle billing and either
The average daily balance method excluding new purchases,
The adjusted balance method or the previous balance method.
What is the minimum finance charge?
Some credit cards have a minimum finance charge. Youll be charged that minimum even if the calculated amount of your finance charge is less. For example, your finance charge may be calculated to be 35–but if the companys minimum finance charge is 1.00, youll pay 1.00. A minimum finance charge usually applies only when you must pay a finance charge–that is, when you carry over a balance from one billing cycle to the next.
What are the fees?
Most credit cards charge fees under certain circumstances:
Annual fee (sometimes billed monthly). Charged for having the card
Cash advance fee. Charged when you use the card for a cash advance; may be a flat fee (for example, 3.00) or a percentage of the cash advance (for example, 3%)
Balance-transfer fee. Charged when you transfer a balance from another credit card (Your credit card company may send you checks to pay off the other card. The balance is transferred when you use one of these checks to pay the amount due on the other card.)
Late-payment fee. Charged if your payment is received after the due date
Over-the-credit-limit fee. Charged if you go over your credit limit
Credit-limit-increase fee. Charged if you ask for an increase in your credit limit
Set-up fee. Charged when a new credit card account is opened
Return-item fee. Charged if you pay your bill by check and the check is returned for non-sufficient funds (that is, your check bounces)
Other fees. Some credit card companies charge a fee if you pay by telephone (that is, if you arrange by phone for payment to be transferred from your bank to the company) or to cover the costs of reporting to credit bureaus, reviewing your account, or providing other customer services. Read the information in your credit card agreement to see if there are other fees and charges.
What are the cash advance features?
Some credit cards let you borrow cash in addition to making purchases on credit. Most credit card companies treat these cash advances and your purchases differently. If you plan to use your card for cash advances, look for information about
Access. Most credit cards let you use an ATM to get a cash advance. Or the credit card company may send you checks that you can write to get the cash advance.
APR. The APR for cash advances may be higher than the APR for purchases.
Fees. The credit card company may charge a fee in addition to the interest you will pay on the amount advanced.
Limits. Some credit cards limit cash advances to a pound amount (for example, 200 per cash advance or 500 per week) or a portion of your credit limit (for example, 75% of your available credit limit).
How payments are credited. Many credit card companies apply your payments to purchases first and then to cash advances. Read your credit card agreement to learn how your payments will be credited.
How much is the credit limit?
The credit limit is the maximum total amount–for purchases, cash advances, balance transfers, fees, and finance charges–you may charge on your credit card. If you go over this limit, you may have to pay an over-the-credit-limit fee.
What kind of card is it?
Most credit card companies offer several kinds of cards:
Secured cards, which require a security deposit. The larger the security deposit, the higher the credit limit. Secured cards are usually offered to people who have limited credit records–people who are just starting out or who have had trouble with credit in the past.
Regular cards, which do not require a security deposit and have just a few features. Most regular cards have higher credit limits than secured cards but lower credit limits than premium cards.
Premium cards (gold, platinum, titanium), which offer higher credit limits and usually have extra features–for example, product warranties, travel insurance, or emergency services.
Does the card offer incentives and other features?
Many credit card companies offer incentives to use the card and other special features:
Rebates (money back) on the purchases you make
Frequent flier miles or phone-call minutes
Additional warranty coverage for the items you purchase
Car rental insurance
Travel accident insurance or travel-related discounts
Credit card registration, to help if your wallet or purse is lost or stolen and you need to report that all your credit cards are missing
Credit cards may also offer, for a price,
Insurance to cover the payments on your credit card balance if you become unemployed or disabled, or die. Premiums are usually due monthly, making it easy to cancel if the payments are higher than you want to pay or you decide you dont need the insurance any longer.
Insurance to cover the first 50 of charges if your card is lost or stolen. Under federal law, you are not responsible for charges over 50.
Before you sign up to pay for any of these features, think carefully about whether it will be useful for you. Dont pay for something you dont want or dont need.
Whats the thing that seems to always happen every time you are finding it difficult to meet your credit card payments? You get slapped with a penalty fee. These fees or penalties seem to always happen just at the very moment you need them least. Someone once described a banker as a man who will lend you his umbrella, and then ask for it back as soon as it starts raining. This seems typical of many peoples dealing with the financial services industries.
What are the reasons that you can be hit with a penalty from your credit card provider? Well the most common is that you fail to make your minimum payment on time. This is by far the penalty that most people hate the most and the one that seems to hit customers at the least convenient times. There are other credit card penalties that can occur for various administrative breaches you commit such as writing a credit card check that bounces, or going over your credit card limit.
There are a number of reasons why you may commit one of the acts that cause credit card penalties to be applied to your account. If it is a first time occurrence or a once off, you may be able to call your credit card provider and request them to waive the fee in this instance. They are only likely to do this if you have been a customer of theirs for some time and have been good at keeping your payments up to date. However, it is always worth asking as many credit providers do allow their employees to give once off good will gestures to customers.
It is generally good practice to take the maximum of care to avoid costly credit card penalties. One of the best and most effective ways of doing this is to arrange to have your credit card paid by standing order or direct debit. Obviously this is only a real option if you are certain to have enough money in your bank account, as if you do not, you will not only receive a penalty from your credit card provider, but will probably face another one from your bank!
However, if you can afford at least your minimum payment each month, and most customers can afford at least this much, then you should consider this option as it means your bill will be paid on time every month and you will not have to worry about incurring a late payment credit card penalty ever again.