Credit cards are quite abundant. That’s not really something that’s groundbreaking for most of us to see or hear. There are a ton of them out there in the world now, and we seem to be utterly inundated with email after email and offer after offer for them. How on earth are we supposed to sort through all of the choices available to us?
The issue is further complicated by those aforementioned offers. When we receive promises of pre-approval, assurances of how high our approval odds are, and hear all of these claims alongside the sign-up bonuses that so many of these companies offer, it’s hard not to feel intrigued and excited. These are all things that are so appealing, after all, considering how tight money is for so many of us.
Unfortunately, there’s a lot lurking under the surface with a lot of these credit cards. To say that the advertising isn’t wholly truthful is a bit of an understatement. It’s important to learn to read between the lines to see what is and isn’t being said in each of these advertisements that we receive.
Today, we’d like to offer you some tips on how to do that, as well as covering some of the various benefit and reward programs that come with them. As you’ll see, there are some that are worth it more than others.
The Basics of Credit Cards
Although most folks do have an idea of what credit cards are and how they work, it’s worth covering them at least to some extent. They’re a type of “loan” that functions as a revolving door. When you accrue a balance, you pay it off in increments. As you pay the money back, you are able to spend it again.
Of course, it’s a little more complicated than that when we delve into it further. Of particular note is the fact that interest will be charged, which can end up bumping the price of what you’re repaying back over time. So, it’s pretty important not to let the balance get too high, lest you get charged a lot of interest.
If you’re able to keep track of things like that, though, then you should be fine. It can help to have a calendar, or a reminder set in your phone or by the app that you use to access the balance on your card in the first place. Either way, the important thing is that you will always be able to see this information and pay off your balance whenever you want.
Perks and Rewards
When it comes to the reasons behind picking on card over the others, often it comes down not just to the terms that are involved, but the perks and rewards programs that are offered as well. An example is a card med reiseforsikring, though we will delve into the specifics of travel insurance a bit further on. For now, let’s stick to the more general stuff.
What are rewards programs, then? It’s pretty much what it sounds like on the tin, although there are some intricacies that we’ll be discussing. There are plenty of different types of rewards, for one thing. They vary in who they cater to as well as the roles that they serve.
Cash Back
Let’s start off with some examples. Perhaps the most common type of credit card reward is a cash back program. Essentially, the card provider credits the holder with a small percentage of each of their purchases, allowing them to earn money back on them. Note: this is a small number, so you probably won’t be earning hundreds of dollars with this.
Additionally, many cash-back programs will have terms that include what specific types of purchases will qualify. Often, this is something like groceries, gasoline, or eating at restaurants. If you’re not sure what the terms are for you, it’s worth re-reading the contract or giving your lender a call.
Sign-On Bonus
Another popular program that we often see are sign on bonuses. This might be in the form of a cash advance like one hundred or even two-hundred dollars, but admittedly, this is not the most common option. Instead, it’s usually something like a limited-time cash back program or points program.
These can be quite nice, but they’re generally not something that lasts the entire lifetime of the card. Depending on the deal that’s offered, and the benefits included, it may not be something that you should let sway your decision too much.
Travel Insurance
At first, you may think that it seems rather strange to bundle travel insurance in with a credit card. However, remember that a lot of cards are designed specifically for travelers! They’ll offer things like rewards for buying plane tickets or something similar.
With that in mind, it only makes sense to extend this to the concept of travel insurance as well. If we define it, it’s pretty simple. This type of insurance is something that protects us from all sorts of incidents that could occur when we’re out abroad.
What might that include? Injuries are huge ones, of course. Have you ever thought about what you might do if you end up hurt while you’re travelling? It’s not something that many of us like to consider, but it’s a real danger. This is especially true if we’re going on a trip that involves physical activities like skiing or anything like that.
Having insurance means that you’ll be protected financially if that sort of thing occurs. Hopefully, that’s something that can be considered a weight off of your shoulders. So, with that said, what else makes travel insurance worth it?
A lot of the time, these credit cards that include insurance will make sure that it includes cancellation insurance. If you or anyone else that you intended to bring along are unable to travel for one reason or another, then you’ll be protected from any fees involved with that. Additionally, you have a higher chance of getting your money back in general.
Is a Credit Card with Travel Insurance Worth it, then?
In order to properly answer this question, we have to examine how a card will let us qualify for the free travel insurance included. After all, there are typically some stipulations and rules involved, which can probably be expected. More often than not, it will involve the need to pay for a certain percentage of the trip with the credit card in question.
Fifty percent or higher is a good baseline there, if you’re considering a card like this but aren’t familiar with how it works. Depending on the trip you’re taking, this could turn out to be a high or low figure, and you’ll have to decide individually if you’re willing to put that much of a balance on a credit card.
Now, many people already pay for their vacations in this manner, so in that sense, nothing much would change. The biggest difference would definitely be that you end up having travel insurance and are protected in case of an emergency or other issues. While there are thousands of travelers who go without it each year, it’s generally not something that’s advisable.
Obviously, though, you’d have to have a credit card that offers this option before you get to enjoy it. So, something that you’ll need to keep in mind is the other terms and conditions of the card in question. What is the interest rate like, for example? Are there other bonuses involved, or just the travel insurance bit?
There’s a good chance that it’ll be included in a card specifically catered to frequent fliers or travelers, so that’s a start in terms of what you can expect going in. At the end of the day, it’s a bit difficult for us to say for certain whether it will be worth it for you.
This means that you’ll need to be the one to determine that. Hopefully, our explanations have helped at the very least! Navigating credit and finances can be really difficult, especially once you start to add insurance and credit cards into the mix. It can feel very intimidating to dip your toes into the metaphorical water, there.
When in doubt, it doesn’t hurt to talk to your creditor or lender to see what they would suggest or to get an explanation of a concept that you’re unsure about.
