Perks Pulling You in

By: Onome Okwuosa

On the hunt for your next or maybe it's your first credit card? Before jumping in at the deep and accepting the first one that happens to fall on your door mat, consider what you want your card to do for you; after all it's your credit so make it work in your favour!

Despite the credit quagmire that appears to have washed over the globe there are still vast numbers of companies vying for customers, especially on the credit card front. So date the companies, let them woo you with their wondrous offers before you decide who you want to commit to.

One of the attractive aspects of a credit card always appears in bold and is used to advertise a card's credentials. These of course are the perks and all the pretty notions that go alongside them. Whether it's air miles or charity contributions there will be a perk that will grab your attention and it is this that the card company relies on to reel you in as a customer. Perks however are never as clear cut as they first appear for in order to truly benefit from them you are tied into a number of clauses, one important one is that of paying your entire balance in full by the due date. Realistically speaking this is not an option for most people making use of their credit card, after all the whole point of taking a card out was to spread the payments, surely if you had the ability to pay in full you would have done so from the outset, no?

Another flaw of the heavily advertised perk system is the actual value of said perk, take air miles for instance, the more you spend the more miles you tally up, and when you cross a certain threshold you can exchange your miles for a real flight in real miles. Airmiles.co.uk have split the world into zones, zone 1 for example includes most UK destinations including Jersey, Amsterdam and Dublin and a flight to a destination in this zone will cost 750 air miles. In real money terms, you would need to spend a whopping ?37,500 before you would be able to trade your money miles into real miles! Considering that is well above the average UK salary the likelihood of ever utilising this perk is slim to none!

So if you did want to fly to Edinburgh which rests comfortable in zone 1 BA need only give you a week's notice to fly on a Friday and return the following Monday, safe to say you will be travelling economy class. When you price-up such a trip you will note that it would only cost you ?94, a miniscule amount in comparison to the ?37,500. That said if you are already an international connoisseur and spend most of your money abroad then you will only need to spend a meagre ?18,750! Considering the air mile accumulation scheme is amongst the most popular of the credit card perk you can see that it serves to benefit only the lender as you the individual are highly unlikely to ever take advantage of it. sad to say the very perk that pulled you in has proved to be pointless.

Interestingly UK inhabitants readily exercise caution, if it sounds too good to be true most people will sniff and then run a mile however when it comes to money-matters all caution is thrown to the wind and people suddenly believe you can get something for nothing! With that in mind before you sign on the dotted line make sure you are doing it for all the right reasons, after all if you are given credit you WILL spend it, regardless of whether the perk comes to fruition or not.

Debt, Loans & Business Cashflow
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