Shopping for a Credit Card

[Mr. B]

I've been using a debit card with my checking account to make purchases for a few years and I am interested in moving to a credit card instead. Among other things I won't be essentially walking around with my whole checking account in my pocket and credit cards offer advantages such as warranty protection, cash back rewards and liability limits.

To the best of my knowledge, my credit history is limited to one VISA credit card account in good standing. It's a business account, however, so I don't want to use it for everyday purchases. I'm well aware of the trap these things can be and I will be paying it off in full every month so I'm not too worried about the interest rate.

I'd be happy to hear any insights you might have to offer... what my priorities should be in benefits, rewards vs interest rates... likelyhood of getting a card with no annual fee in spite of my limited history, etc.

 

[Holdfast]

I don't know how things stand in the US market but based on the UK, and before all the BS nonsense starts being spouted by people who lack the willpower to control their own spending adequately, here's what I know from the UK market:

1) AMEX (ok, not technically a credit card, but worth mentioning) is ruthless in supporting your corner in buyer disputes. They really take your side and will get you your money back/rights enforced.
2) Airmiles is the most useful rewards scheme. I just cashed in most of my miles from the last 2 or so years normal spending for a return ticket to Mauritius, for instance. In pure monetary terms, you can probably get a better cashback rate from some other cards though.
3) If you intend paying everything off monthly, as most wise people do, then the interest rate is irrelevant - focus on no/low annual fee, good rewards and a track record of supporting the buyer in disputes.

 

[Mr. Laser Beam]

AMEX (ok, not technically a credit card

Huh?

 

[Agent Richard07]

AMEX (ok, not technically a credit card

Huh?

American Express started offering credit cards in the last decade or so, but their main product is their line of charge cards. Charge cards have no pre-set limit and the balance is due in full every month. You can't carry a balance. If you do pay late, the interest rate is 30% per year (about 0.0822% per day) as opposed to the lower rates most credit cards have, and your account is considered delinquent.

 

[Holdfast]

American Express cards are typically charge cards, not credit cards, though they do now offer credit cards in their range too because it broadens their market.

IIRC, mine is a charge card, though I must admit that since I pay everything off monthly by direct debit anyway (so don't notice the difference) and my memory is hazy, I wouldn't say I'm sure about that. But I think it's a charge card.

EDIT - I see Agent Richard's simul-posted the same info.

 

[ByrdMan]

AMEX primarily issues Charge Cards, which requires you to pay it off every month, although I believe they do offer credit cards now.

EDIT - Make that three... oops!

 

[Holdfast]

I think we should just chalk up all the repetition to independent cross-referencing of information, which should reassure others of the validity of our data...

Either that, or we need to refresh more before posting.

 

[Lookingglassman]

I paid off all my credit cards and got rid of them and I am happy. I use debit or cash for all my purchases now. I never will own another credit card as long as I live.

 

[ByrdMan]

Congratulations! I'll just continue to use mine wisely.

 

[Lookingglassman]

I did too, but got sick of paying the interest. I found it easier to just save for what I want and buy it than to buy it with a credit card and have to pay interest on it or a fee.

 

[Mr. Laser Beam]

AMEX primarily issues Charge Cards, which requires you to pay it off every month

I honestly had no idea these things existed. I guess I'm more sheltered than I realize.

I have an AMEX (and a MasterCard) through USAA, which is my insurer, and a VISA through my bank. All three of 'em work fine for me.

I would not get a card from any bank that I wasn't already doing business with in some fashion. Less hassle that way.

 

[Agent Richard07]

American Express started offering credit cards in the last decade or so...

Just to clear this bit up... American Express lauched its first credit card in 1987. Their first charge card however was launched 29 years earlier, in 1958.

And Mr. Laser Beam, I'm sure you've seen this American Express card...

It's the current look for their classic charge card. It's also the Amex card most people are familiar with, although many probably don't know that it's not actually a credit card.

 

[propita]

AMEX primarily issues Charge Cards, which requires you to pay it off every month

I honestly had no idea these things existed. I guess I'm more sheltered than I realize.

I have an AMEX (and a MasterCard) through USAA, which is my insurer, and a VISA through my bank. All three of 'em work fine for me.

I would not get a card from any bank that I wasn't already doing business with in some fashion. Less hassle that way.

Mr. Beam, I guess I never paid attention that USAA worked that closely with AMEX.

If you can pay off the total monthly bill, AMEX is a pretty good deal. And they DO support you--my Dell problem (a faulty battery that they would not take back)? Amex halted payment until the dispute was settled and got an RMA number from Dell so I could return the battery--and not get charged, as Dell was doing its damnedest to do.

So...guess I won't be buying Dells in the future.

 

[Mr. B]

AMEX is an attractive option but I'm reluctant to have one as a sole credit card as they don't seem to be as widely accepted as Visa/MC.

 

[Agent Richard07]

AMEX is an attractive option but I'm reluctant to have one as a sole credit card as they don't seem to be as widely accepted as Visa/MC.

That's true. Amex shouldn't be your only card for that very reason. You could always get one or more of each so that you're fully covered and have backups in case one doesn't work.

 

[Mutai Sho-Rin]

I would look for a card with no annual fee as a primary characteristic. If you plan to use it as a convenience and pay it in full every month, the interest rate is a moot point. Unless you already have a frequent flyer plan and will put tens of thousands of dollars through it annually, a reward card probably isn't worth too much.

We buy Shell gasoline and have a Shell card that gives a 5% rebate on all Shell purchases. It is also no fee so it might be a good choice if you own and use a car.

 

[Mr. Laser Beam]

AMEX is an attractive option but I'm reluctant to have one as a sole credit card as they don't seem to be as widely accepted as Visa/MC.

I only use my Amex online. All the online stores I've ever used, accept it. I figure it's a good idea to have a card that I *only* use online.

One thing I really don't care about is rewards. I don't really spend enough to earn a significant amount.

 

[Agent Richard07]

I'd say that a card that offers some sort of reward is always good. If you pay your balance off in full every month and your card doesn't have an annual fee, it's like they're paying you to use their card. I won't get a card that doesn't have rewards. Right now I have about $50. in points that I can use to get groceries, and I got all that just from using my cards.

The Amex charge cards have an annual fee. If you spend a lot of money and make use of the perks that the cards have, then you'll get your money's worth, otherwise, it's just another fee.

 

[Mr. Laser Beam]

The Amex charge cards have an annual fee. If you spend a lot of money and make use of the perks that the cards have, then you'll get your money's worth, otherwise, it's just another fee.

I refuse to use any credit card with an annual fee. If any of my cards starts charging one, I'll dump the sucker.

 

[Scout101]

I did too, but got sick of paying the interest. I found it easier to just save for what I want and buy it than to buy it with a credit card and have to pay interest on it or a fee.

At the risk of drawing in the usual credit card nazi, that doesn't make any sense. At least, if you have any self control, the credit card doesn't make a difference.

The BEST way to do it (IMO)? Save up to buy the item. Buy it on your credit card, which should get you reward points, or cash back, or whatever scheme you've picked. Then pay off the credit card with the money you saved up. You pay no interest, no fees, and get 1-2% cash back on the deal, plus the additional consumer protection deals through the card.

How come everyone with a lack of self control blames the card, and not their shitty spending habits? If you pay it off in full every month, and only charge what you can pay off, credit cards are a huge plus, with no discernable downside.