Which is better? – The Great Credit Card Debate

When people are asked about the biggest credit cards they know, they usually only respond two things, these are Visa, and Mastercard. But what makes these two tick? What are the differences of the two? What is one things the one does not have and the other does? What makes the other one better and the other one not? Which one would we benefit more from and what are the perks as compared to the other one?

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There are many questions that we can ask regarding these two companies, so many that it can be endless. We can spend day in and out talking and comparing these two but we don’t really know if we will end up with a strong and certified winner. Some people think that the difference between Visa and MasterCard, the two leading credit card companies in the world today, is very vague. They are both great competitors in the areas of credit and have both achieved things on their own. Aside from the fact that one has been in the business longer and that the amount of issued credit cards is very evident, Visa has claimed that they have already distributed and issued almost a billion credit cards around the world while MasterCard only has about over twenty five thousand banks issuing cards, which can account for about 20 million cards in total around the world. Another thing is that as far as the credit consumers are concerned in this debate, there is really no difference between the two. They are both widely accepted internationally and that there are over one hundred fifty countries that accepts them. As a matter of fact, it is very difficult to find a place that does not accept these two companies in their establishments. The funny thing about this is that neither of these companies actually issues cards. They are just mainly a method of payment. They rely on the banks in the various countries that issue credit cards to utilize these payment methods. Most of the people actually say that these two are actually just the same thing with different names as their methods of payment are similar and the rewards that you get from both of them are also alike. We think that it is just a matter of what you feel like you should apply for when the time comes. It’s quite an easy decision for most of the people who have not yet tried to have a credit card.

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Debt Consolidation: Good or Bad?

Debt consolidation is what it means to take out a loan to be able to pay the debt you owe because of the previous loans that you took. The people who need a way to secure a loan that generally has a lower interest rate and attain a loan that only offers a secured and fixed interest rate typically do this. When people think of debt consolidation, it is usually defined as or referred to simply as a number of loans that aren’t secured, that are carried over to cover other unsecured loans. But more often than not, there is another loan, this time secured, that is involved so that it will double what will go against the asset that serves as collateral. This is what usually happens when people take out home loans or mortgages for their houses. In this case, a mortgage is secured against the house, just in case the person who took out the mortgage is not able to pay his monthly dues, the bank or the lending company can seize the house in exchange for his debt. The collateralization of the loan is what allows the interest rate to lower rather than being without it. This is because through the collateralizing of the asset, the owner of the said asset agrees that he is allowing the forced sale, or the foreclosure, of the asset to pay back the loan that was taken out in the first place.

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The risk, which is mostly on the lender, is reduced so the interest rate offered can be lower than those with greater risk. Sometimes the companies that offer this type of debt consolidation care the ones that offer the discount when you apply a certain amount of loan. When the person that is interested to take out a loan to pay off his other loans, also if he is nearing the risk and dangers of bankruptcy, the debt consolidator is offered to buy the loan at a discounted price. Debt consolidation is typically advisable when someone is paying a credit card debt. This is because the nature of credit cards can carry a much larger rate of interest than even an unsecured loan from a bank. The debtors that here on out have properties like houses or cars may get a lower rate through the types of loans that they call secured loans by using the property that was previously mentioned, as collateral.3

Credit Card Loans: Which? Which? Which?

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Credit cards, one of the modern marvels that we know in today’s world. They are the plastic heroes that we tend to forget to appreciate when we make that unnecessary purchase of new shoes or bags, or sometimes the clothes that we only wear once sometimes not even. Sometimes we also but things that we don’t really need like the newest model of a screwdriver that is exactly the same to what you already have but with the addition of a new grip. All of these possible because we used our credit card and we didn’t have to pay for the useless things that we buy at once, making our guilt lighter on us because we didn’t have to pay for it right there and then.

 

But what are credit cards and what is a credit card loan? Well the functions and ability of a credit card to pay for you the purchases when you do not have cash on hand is very useful. Sometimes people actually choose not to bring any cash with them at all and opt to just bring their credit card with them. The issuer of the credit card essentially lends you money, or loans to you the money to make the purchase, this way, you are able to repay that loan at a future date being charged with an interest rate.

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There are many types of credit card loans and here we will tackle a few of them. Some of these credit card loans are Secured loan and Unsecured loans. Most of the loans that are out there are unsecured loans which means that you do not have to used any kind property as a form of collateral for the loan. This being the case, you do not get to pay what you owe, the credit card issuer has to immediate way for them to get and replace their loss from you. That requires the issuer to be cautious on who they issue their cards to so that they can avoid these kinds of situations. Some of the people who have no credit history or a poor credit history can still get a loan but these are not called secured loans. These are the loans that require you to have a piece or property, let’s say a house or a car, as a form of collateral so that if you are not able to pay what you owe the credit card issuer, they can take your home or your car from you to help pay for what you owe them.

Credit Card Benefits You Didn’t Know

  • Chargebacks

Sometimes we encounter events where we are not satisfied by a service or a product we paid for.  Although, not all the time that we get to get a refund, but if you used your credit to purchase such, then your credit card company might give you a refund and that is called Chargebacks.  Your credit card company returns your money and then charges it to the business that sold you such service or product.  Although, this will of course go under specifications and specific requirements before you are granted of a cash back.

 Image taken from: BTC Theory

Your credit card company can give you a refund if you are not satisfied with the product or service you bought.
Image taken from: BTC Theory

  • Extended Warranties

When you buy a new cellphone, iPad, or a new microwave, it usually comes with a one year warranty but did you know that with your credit card company you can make it into a 2 year warranty?  Yes, extended warranties are possible when you use your credit card. This way you can maximise the warranty of your product and have it fixed incase it breaks within that period of time.

  • Extended Return Policies

Many retailers only have a return policy of 30 days but many credit card companies are able to extend such.  For example, under the company MasterCard, they will refund you 250 dollars if you are not satisfied with your purchase within 60 days even if the store does not accept it.  Of course this is in terms that the item is still brand new or in very good condition.

Image taken from: beroNet

Items purchased using a credit card could have extended return policies. Image taken from: beroNet

  • Theft Protection

Many stories have gone viral online about how their credit cards was stolen, copied and duplicated and used for purchasing items although a consumer has a protection against such event.  From the company MasterCard, they will cover most of the items purchased if found out it was stolen as long as it is still within 90 days.  This way, you do not have to pay for the items the theft bought.  Other companies like American Express also applies the same policy.  This is under the 90-day protection against damage, fire or theft.

These are examples of credit card benefits that people doesn’t often know.  There are a lot of articles that tackle the downside of credit cards and its disadvantages, but credit card companies continues to improve their system and service to give it’s clients the best service as well as to protect them from any fraud and the like.  The bottom line is that these credit card are still under our power and it will be for the better or not depending on how we use it.

 

Should I get a Credit Card?

If you are thinking of getting a credit card then here are some advantages and benefits you could get:

  • Convenience
Credit cards are convenient to used. Image taken from: Bank of America Corporation

Credit cards are convenient to used.
Image taken from: Bank of America Corporation

It is one of the best benefit of having or owning a credit card, the convenience it brings you.  Imagine not having to bring cash to be able to buy or purchase.  You don’t also have to go around and find an ATM to withdraw money.  You can purchase an item and pay on a later date and even little by little.  Credit cards have taken us to a whole new level, with just one swipe, the item is already in your hands.  You can do all of these and more, with just one card.

  • Records your Purchases

At least once in your life you have experienced the struggle of tallying and doing basic accounting with your money and where you have spent it.  You have experienced that headache caused by thinking all night where you spent that thousand dollars and you just can’t seem to remember.  With having a credit card, it automatically lists the purchases you make.  You can ask your bank for your records or credit card statement.  This way, if you see a purchase that you haven’t made you can raise up the concern with your bank and you are updated with how you spend and to where it goes.

  • Perks / Rewards

Have you heard that certain types of credit cards offer perks and benefits?  Well yes, there is what you call a Rewards Credit Cards.  This type gives you points every certain purchase.  This means that you earn from the purchases you make.  These points can then be converted into rebates, discounts, travel miles, freebies and other more.  For some banks, these points can even be converted into cash which you could use and just be deducted from your next purchase.

  • Instant Cash
Credit cards are instant cash. Image taken from: Amazon

Credit cards are instant cash.
Image taken from: Amazon

Credit cards are like instant cash.  If you need to buy something right away and you are expecting your money after a few weeks in, then you can still make the purchase because of your credit card.  Booking a flight, shopping online and even buying applications to your iPhone were also made possible because of a credit card.  You can use your credit card almost everywhere and often times, even when you travel abroad.  It serves as an instant pocket money and you do not need to convert your dollar to a different currency and just use your card.

 

Say NO to Credit Cards

Having a credit card is almost a necessity today.  Most have a hard time when they do not have their credit cards with them and some may even not be able to function properly and do their usual routines.  We have reached that century where credit cards have replaced cash for most people.  People have already experienced the convenience of not having to bring large amounts of money when you have to buy something and also having to delay the payment of the purchase you have made.

A lot of unfortunate events have still occurred related to having or using a credit card.  This is because even though credit cards have made the life of many easier, it also has it’s disadvantages to its consumer or users.

First and foremost is that, it can be easily overused.  Since credit cards are super easy to use, it is easy to be overused as well.  With just one swipe, you can buy a new furniture, a new cabinet of clothes, a new rack of shoes and a lot more.  Since you do not have to pay right at the moment the purchase was done, even if they cannot afford the said purchases, they still use their credit cards to buy it.  With the system of revolving credit, some people have the mindset of just letting the debt carry over to the next month and not pay it right away but this will just increase your debt because the interest rate keeps on adding.

Another disadvantage of having a credit card is that it has interest rates, and they are usually high, and unexpected or hidden charges.  As mentioned a bit earlier, the debt caused by your purchase will end up being more expensive because of the additional charges from the interest rates.  The issue of having hidden charges and fees have already been brought up by a lot of consumers.  A lot of consumers have complained that they were shocked once they received their bills and it was way more than what they have expected and when they cleared it with the credit card company, it was due to other fees from the credit card.

You end up paying more because of interest rates.  Image taken from: Rate-Bee

You end up paying more because of interest rates.
Image taken from: Rate-Bee

Last disadvantage is that, credit cards could be copied and duplicated and be used by someone else.  There are an increasing number of stories about credit card frauds, scams and identity theft.

Credit cards are prone to being copied and stolen.  Image taken from: Pittsfield Police Department

Credit cards are prone to being copied and stolen.
Image taken from: Pittsfield Police Department

Credit Cards “Rewards”

Rewards Credit Cards Image taken from: Credit Card Chaser

Rewards Credit Cards
Image taken from: Credit Card Chaser

It is true that there are a lot of benefits from having a Credit Card with a rewards system.  This way, you earn from the purchases you make.   From each dollar you spend, you get a corresponding point that when accumulates, you can use for spending, travel miles, discounts and other offers from your credit card company.  Some may also use the said points for rebates.

Although such type of credit card entails some benefits, it also carries disadvantages that sometimes makes you think twice if you should avail this type of credit card.  Credit cards with rewards usually comes with high interest rates which would mean that you are going to pay more when you are to settle the money you borrowed than using just a normal type of credit card.  Annual fee is also costly compared to the other credit cards.  It is more expensive and that means you are going to spend more yearly.  Usually, with this type, variable interest also applies which means the rate you are paying could change over time unlike the other credit cards which have a fix rate once you apply and until you terminate your credit card.  Some credit card companies offers low interest rates from the very start and this magnets a lot of consumers but since this type is subject to variable interest rates, the credit card company increases the rate through time and you’ll end up having a really high interest rate.  So, be careful with offers like this and always think twice if the interest rate offered is way cheaper compared to the usual offers.  Once you are done with the introductory rate, you are to be charged with the normal rate which is expensive.

Although Reward Credit Cards entail benefits, it also has its disadvantages.  Image taken from: Law Professors Blog

Although Reward Credit Cards entail benefits, it also has its disadvantages.
Image taken from: Law Professors Blog

Another thing that consumers who have Reward Credit Cards should remember is that the points they earn expires.  A lot of consumers have already been victims of such.  In some cases, since they want to accumulate more points, and they are not aware that these points expire, the end up with nothing because the points are considered null once it reached the expiration date and you still haven’t used it.  Some cards also stop taking in points once you have reached the maximum number of points so even if you still use it to purchase and buy, no points are being added anymore to your card.

 

 

Getting out Debt Traps

If you are already leading to being strangled with debts and drowning in your long list of payables, then here are some pointers you could take note of that might help you in your situation:

  • Asses

If you are already drowning with your debts and the stress that comes along with it, stop first and sit, then asses.  Asses where you stand financially.  You cannot find a solution it you haven’t fully assessed your condition and the problem.  Also, with this, you could know how much more time you have to fix everything.

  • Prioritise
Prioritise on which you have to pay first.  Image taken from: Mint Life

Prioritise on which you have to pay first.
Image taken from: Mint Life

If you are encountering quite a long list of debts, prioritise which you should pay first.  If you cannot pay everything all at once then check which debts should be covered first and which ones could be cleared off last.  Usually it is better to prioritise settling debts with higher interest rates.

  • Consolidate
Consolidate your debts into one.  Image taken from: Stumble Forward

Consolidate your debts into one.
Image taken from: Stumble Forward

Some cannot keep track already because of the scattered debts they have acquired and the best way to handle situations like those are to consolidate.  All of your current debts will be taken into one thus you will end up just paying for the totality of all the debts.  This way you are sure no debt would be forgotten and that you won’t have to choose which ones you have to pay off first or last.

  • Talk to your lender

Often times people who are having struggles hide from their creditors which is the total opposite of the right thing you should do.  When you are struggling with your debt, go and talk to your lender or creditor and you might just end up having a new agreement or terms that could be easier for you to handle.

  • Still follow a budget

When people realise that they are already buried in debt, they stop making and following a budget.  They see no point in it but actually not following a budget would only allow you to not spend your money wisely and well-planned of.

By following these pointers, it might help you recover from your debt trap and improve your financial position. Although often times, situations are still cased to cased basis, and these pointers may help one person and not the other.  Just always remember that spending money should always be well-planned and should be done wisely.

 

 

Best Credit Cards in Japan

For those of you out there who have international credit cards like Visa, Mastercard, CitiBank, American Express and the like, you will find it very convenient that you can use them outside the country and easily when you are in a foreign country and you don’t have much cash on you. Sure this is easy and convenient but the fees that will rack up your billing statement might surprise you as the international usage fees can take a huge toll on your savings account. All of these can be avoided if only you have a credit card that is issued from that country that you are in. Of course it wouldn’t be practical to get a credit card from the said country if you’re only staying there for a couple of days or weeks. This is however advisable for someone who is staying for a year or more and you know that you will be using the credit card a lot. This is also the case for those who want to spend a good duration in the busy country that is Japan.

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For people who are living in Japan for a good amount of time, whether it is because of school or because you have a new job that requires you to move to the Land of the Rising Sun, getting a credit card can help you loads and can slash a huge chunk of international usage fees from your international card.

You can apply for a lot of credit card at a lot of banks and credit card companies with ease. Some don’t really require much if you don’t aim for the more “high-class” cards with the sparkling reward system. There are a lot of cards to choose from because of the convenience that they offer and the rewards that they give you. One of these cards is the Seven Card. They are carried by Visa and JCB, and only require a 500 yen/year fee, also the first year that you have this card, there are no annually fees yet. You can also exchange the points that you earn to shop or to ANA miles. Another one of these great cards is the Saison Card International credit card. They are carried by Visa, Mastercard, and JCB and do not require any sort of annual fee for the entire duration that you have that card. Their point system also offers you to exchange the points you get for shopping and they do not expire.

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Avoid These Debt Traps

  • Interest Free Promos

There are tons of ads in the television, billboards, and online sites that brag about deals with no interest fee to magnet consumers but be mindful because often times these ads does not speak of the truth because there are usually hidden charges to compensate it having no interest fee.  This means that you are to pay more than what is expected.  Such promos would sometimes incur having large amount of penalties incase you have missed your payment.  Such events could only sink you into a bigger credit debt.

  • Availing more Credit Cards than you need
More credit cards would mean more debts.  Image taken from: Business Insider

More credit cards would mean more debts.
Image taken from: Business Insider

It is already such a pain to handle and clear off the balance of one credit card for an average working person, so just imagine having more than one credit card to pay off.  Some people may think that availing a new credit card would help and ease their burden in purchasing and payments but later on when the bills arrive, this will just give you more headache.  Do not get an additional credit card if there is no need for it.  Having many payables will just also increase the probability and chances of you being in greater debts.

  • Budget and set a LIMIT
Create and follow a budget Image taken from: Funds for NGOs

Create and follow a budget
Image taken from: Funds for NGOs

You may have heard it from a lot of people already how having a budget is a helpful tool for them.  Create a budget for the income you are receiving because that way, your expenses are well planned and though of.  Of course a budget could only work if you follow it.  Having a budget would also set a limit to your expenses and that way you don’t get to overspend or spend beyond what you are just capable of spending.  Going beyond your limits would mean you having a hard time paying the debt off because it is already beyond what your money can cover.  Be sure before making any purchases that you can afford it and going beyond your budget and limit and a road leading towards big debts.

  • Do Something

If you are already one foot in the debt hole then you must act on it.  Ignoring letters and notices from the bank or company you owe from would not solve anything and will eventually lead into you having both feet in the hole.  It would be of help if you talk to your bank or lender and tell them that you are having troubles handling your debt.