Credit Cards: Choose a Suitable Card!

Do you know what kind of credit cards you have? Do you know what benefits you can get by choosing appropriate cards? No…

I was quite shocked by … how many different kinds of credit cards there are on the market! This website highlighted 10 basic types. Naturally, I was interested in looking for credit cards that can generate revenue… This falls into four basic groups that can help:

  1. Rewards Credit Cards
  2. Cash Back Credit Cards
  3. Airline Miles Credit Cards
  4. Balance Transfer Credit Cards

Each of these can generate a variety of advantages for the careful investorblogger. For example, for IBs the rewards cards can generate a good source of useful Christmas and birthday gifts that you don’t have to shop for, and get delivered. The only problem is the limited selection and availability. So it’s not really reliable.

Cash back cards really have a kicker. Every time you shop you get a little something back. These cashback cards can amount to quite a savings stream, if you switch your cash based shopping to credit cards. It can work out nicely: your bills are delayed 2 weeks to six weeks allowing your cash to earn interest in the bank. When your bill is received you will receive cash back on your shopping. Rates start from 1%, and some cards have NO limits! So you receive a nice fillip each month.

Airmiles cards allow you to get discounts on air tickets, such as this “Earn 1 mile for every $1 spent on purchases”. Obviously rates are more complex and each card seems to have its own way of dealing with airmiles. If you travel a lot, this could be a good choice!

Balance Transfer Cards allow you to transfer money from another card for a limited period. I’ve read about people successfully juggling these to attract an interest free loan that they then invested for about 5%. This is a great way to earn money. HOWEVER, you need to read the rules for your chosen card, and do a bit of research in order to avoid being screwed on this one.

Personally, I don’t travel much, and can’t bear the selection of gifts on rewards cards. So options #2 and #4 would appeal to me a great deal more. In general, it’s not a good idea to have a great deal of credit card debt. Avoid the interest rates which are criminal at times! Just pay off the balance (except in #4!).