First, I do not believe credit cards are necessary, do not use them (I have used debit cards, cash and checks for the past 7+ years) and have seen, too often, how the balances get out of control.
Second, no, the rewards points are not in your best interest. They make money for the provider. How? Because, based on several studies, credit card users spend 25%-30% more when purchasing small items (under $25) and spend 15%-18% more on larger purchases.
Third, some credit card companies have proven their intentions as we fast approach this February 22nd deadline when the Credit Card Accountability Responsibility and Disclosure Act of 2009 takes effect. The credit card provider will no longer be able to increase your interest rate without 45 days notice, not increase your rate on a new card for one year, and then, if the rate is changed, can no longer apply that rate to past purchases...
unless...
the rate on your credit card is variable and not fixed (though the rate won't apply to past purchases as I understand it but you better check your situation).
As reported in the February 2010 issue of Kiplinger's, "...Issuers have been switching cardholders from fixed interest rates to variable rates for months to take advantage of this loophole..."
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.