Originally published March 14 2005
Wise credit use makes cards a valuable ally
by Mike Adams, the Health Ranger, NaturalNews Editor
Credit cards can drive consumers deeply into debt and lock them into a cycle of high interest rates and late fees, but experts say that the cards are a valuable tool for people who use them correctly. Using cards to purchase goods and then immediately paying off the balance is convenient, and provides some protection against unscrupulous merchants.
Credit cards have earned a bad reputation for driving Americans into debt made worse by high interest rates and late fees.
If you pay the balance in full each month, you essentially are shopping with a short-term interest-free loan.
"It's a wonderful advantage to have cards that are unencumbered, to have the credit ready in an emergency."
And should an emergency arise, the credit is available for you to use.
Charging purchases is a form of insurance, too: a credit card issuer will help you dispute charges if you run into problems with a disreputable merchant.
And in some cases, a credit card will even extend the manufacturer's warranty.
Then there's protection against identity theft: Under federal law, you are only responsible for the first $50 of unauthorized charges.
Beyond a credit card's security, there are some 20,000 rewards cards that let you earn anything from gift certificates at your favorite restaurant to contributions in a Fidelity investment account.
Plus, you don't want to carry a balance because interest rates on rewards cards tend to be 1 percentage point higher than regular cards, according to Curtis Arnold, founder of CardRatings.com, a free resource that rates credit card offers.
Those who have dutifully paid bills on time and built up a strong credit score should consider their lifestyle in picking a card.
For instance, if you want help with paying down a mortgage, the Citi Home Rebate Platinum Select card applies 1 percent of every dollar charged toward the mortgage principal.
Even the popular cash-back cards may not be straightforward, with some basing the rebate amount on the level of spending or on specific vendors, such as grocery stores and gas stations.
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