Cash Back vs. Rewards Credit Cards Written by Joseph Kenny
Ah, sweet rewards of using credit!
Not only do you get immediate gratification with buy now-pay later plastic, but now, many credit cards offer rewards and incentives for using their card to make purchases. You can get cash back, or gift cards, or ‘reward points’ that you can spend on merchandise or services from various merchants. There are also cards that allow you to designate your ‘cash back’ points to a charity – sometimes called affinity cards – and those that put your cash back into a special savings account for college.
Great deal, right? You spend your money and get something in return. The catch is, of course, that you’re paying interest and card fees to get your cash back rewards. But if you’re going to be using credit card anyway, you might as well get something back out of it, right?
Most cash-back cards give you 1-2% cash back on most of your purchases. You’ll get a check at specified periods for amount of your ‘rewards cash’. You can cash check and spend money on anything you want.
Reward cards give you 1-5 reward points for every dollar that you spend at different merchants and types of merchants. Most pay you 5 reward points for purchases made at their ‘Merchant Thank You’ network, and for purchases made at gas stations, drug stores and supermarkets. You’ll get 1 reward point for every dollar that you spend at other merchants. You can then redeem your reward points for particular items from merchants that belong to credit card’s merchant network.
Which is better choice?
Home Equity Loan – When Does Refinancing Make Sense?Written by Charles Essmeier
For last two years, interest rates have been much lower than anytime during last thirty years. This has resulted in an unprecedented boom in real estate sales, home refinancing and home equity lending, as borrowers try to take advantage of these rates for long term. But refinancing or even borrowing against your home’s equity may not make sense for everyone. When is it a good idea to refinance your home? When is it not advisable?
Traditionally, lenders advised homeowners not to refinance unless doing so would lower interest rate on loan by 1-2%. While anyone who can save 2% on their interest rate would almost certainly benefit from doing so, others might find refinancing worthwhile even with a smaller reduction in interest rate. Increased competition among lenders has brought costs of refinancing down in recent years, so homeowners can realize a significant reduction in their home payments with reductions of ½% or so, depending on size of their mortgage.
The key to whether or not refinancing makes sense is how long homeowner intends to remain in his or her home. The costs of refinancing, which can run $1000-2000, are amortized over life of loan. For many people, a reduction of $50 or more in house payment would be more than enough to justify a new mortgage. If payments cannot be reduced by at least that much, or if homeowner plans to live in home only a short while, refinancing may not be a good option.
Refinancing may also make sense for those with Adjustable Rate Mortgages