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re: Chase Freedom Card - pros/cons?
Posted on 11/21/12 at 8:45 am to RetiredG8tr
Posted on 11/21/12 at 8:45 am to RetiredG8tr
No disrespect intended to you retiredg8tr, but I'm going to guess by your username that you aren't familiar with trends in the past 2-3 years in credit card land.
First off, many (if not most) cards offer rewards if you use it for your purchases. Some offer cash back, usually 1-2% for every single purchase. Others offer airline miles. Whatever it is, it is effectively a discount.
Second, of course you can pay the bill every month and not pay interest at all, which surely you are familiar with. But these days (again, if you have good credit) many cards offer teaser rates of 0% APR for a year or more. That's right, they are effectively paying you to use their card. You do have to pay monthly minimums but that's it.
Of course, the honeymoon does eventually end and you have to pay it off in full, it's just that you have a year or more to do it.
Real-life example: I got a credit card that offered 0% APR for 18 months, and 5% cash back on home improvment purchases. Instead of financing my new kitchen/bath project in a HELOC I put it on this card. After 18 months paid off the card. This saved me about two grand vs. paying cash.
So long as you make sure you can pay the bill at the end it is a no-brainer to do this.
First off, many (if not most) cards offer rewards if you use it for your purchases. Some offer cash back, usually 1-2% for every single purchase. Others offer airline miles. Whatever it is, it is effectively a discount.
Second, of course you can pay the bill every month and not pay interest at all, which surely you are familiar with. But these days (again, if you have good credit) many cards offer teaser rates of 0% APR for a year or more. That's right, they are effectively paying you to use their card. You do have to pay monthly minimums but that's it.
Of course, the honeymoon does eventually end and you have to pay it off in full, it's just that you have a year or more to do it.
Real-life example: I got a credit card that offered 0% APR for 18 months, and 5% cash back on home improvment purchases. Instead of financing my new kitchen/bath project in a HELOC I put it on this card. After 18 months paid off the card. This saved me about two grand vs. paying cash.
So long as you make sure you can pay the bill at the end it is a no-brainer to do this.
Posted on 11/21/12 at 8:49 am to foshizzle
In case you are wondering how the card issuers make money when you pay no interest for a year, they charge merchants a fee for every transaction. So long as you use it a lot they still make money. Also, the card issuers in turn are themselves borrowing at historically low costs, practically zero once you take inflation into account.
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