Chances are you have one or more in your wallet and a new pre-approval in your mailbox. This financial toll booth is nearing a necessity in today's society.
Unless you live in a home still surrounded by a moat it's pretty difficult to get by without one. Airlines, hotels and car rental agencies are pretty insistent upon safeguarding their interests. At the gas pump pre-approval or payment is mandatory before petrol flows.
In the hands of most they create no issues with a few perks. Link to the right rewards program and you can start planning your holiday destination. However, to those lacking self-discipline they can quickly become the crack cocaine of the financial industry spiralling one towards the abyss of debt.
The purveyors of cards will extoll the virtues of a cashless society; safer for employees, less time consuming for business owners, no bad debt, more difficult for the underground economy and criminal enterprise forced to find an appropriate laundry. All true. As is obscenely profitable for them.
If you consistently carry a balance or are increasing that balance you need to read the Cardholder Agreement and Information on Rates and Fees. Make a plan to get out. If you don't someone else will. Otherwise, here are some of the perks most cards will have attached to them when you make a purchase.
Purchase Protection-covers the first 90 days from purchase for theft or damage.
Extended Warranty-often doubles the original manufacturer's warranty period for up to a maximum of 1 year.
Zero Dollar Liability-provided you have taken reasonable steps to safeguard access of your account to others you are not held liable for fraudulent use or theft under reasonable conditions.
Travel Protection -this usually includes baggage loss, common carrier accidental death and dismemberment, unexpected return home and car rental collision damage waiver.
As always, the devil is in the details. No time to consider at the till of a merchant or rental agency when making a purchase so you must know in advance.
The average person may know the basics and from time to time consider when making a purchase. Those with exceptional acumen will know the fine print and the pros and cons of each feature and the competition's cards. Those in need of some assistance may only know their minimum payment and interest rate.
The cards are here to stay so we should befamiliar.