Credit Rewards Cards: Are They Right For You?Written by James Dimmitt
Rewards cards have become latest rage in credit card industry. In past, consumers shopped for credit cards that offered lowest interest rate. Next came cards with low interest rates and no annual fees. Today, consumers can shop for cards based on what type of “reward” they can earn for using a specific issuer’s card.
How does a reward program work? Typically, program awards points, "dollars" or a cash value based on amount you charge. The rate at which you collect points varies depending on what you charge or where you charge it. Some programs offer extra points for using their card at a specific place such as a supermarket or fast food restaurant or for certain items.
Some programs offer a variety of rewards. Consumers can earn meals, tickets to sporting events, airline tickets, electronics, or even create their own reward program.
The goal is to get you consumer to use your credit card as much as possible. Why? FEES! The credit card issuer makes money from two sources each time you use their card. First, from merchant who pays issuer a merchant transaction fee and secondly, from you through finance charges and late fees.
Think Twice Before Co-signing For Anything!Written by James Dimmitt
A few years ago a friend asked me to co-sign on an apartment lease for him. This friend didn’t have perfect credit and couldn’t get apartment without a co-signer on lease. He assured me that he was cleaning up his credit; in fact, manager of apartment told him he could resubmit his application and probably wouldn’t need a co-signer after first six months of lease.
He pleaded with me to help him this one time and promised me that nothing could go wrong. So, believing in my friend and that six months down road I could have my name taken off lease agreement, I took a chance and co-signed contract for my friend.
Three months later my friend lost his job, couldn’t afford his rent payments, and wound up moving back in with his parents. Complicating matters worse, my friend wound up owing additional fees for breaking his lease. When he couldn’t afford those fees, guess who management company came after? That’s right - his co-signer, me!