'Customers more interested in incentives than APRs'
May 20, 2010 at 10:47 am
Everyone likes to feel they are getting something for nothing. But could our desire for a freebie actually be costing us dearly where credit cards are concerned?
Recent research by moneysupermarket.com has revealed that when it comes to choosing which credit card to apply for, over half of us are more interested in the incentives than the boring small print.
Credit cards play an important part in budgeting for the majority of us and if you are the type of person who always pays their credit card bills in full then the details such as the APR are probably not very relevant to you.
In that case you have a wide variety of incentive schemes to consider, from air miles to cash back and of course loyalty points which can be used for things such as money off goods in shops, discounts on Eurostar and reductions in your restaurant bill.
If, however, you do not pay your bill in full each month then it is vital to take a good look at what you will be charged in interest. A fiver off a pizza suddenly looks less attractive when you are paying for this many times over in terms of how much your provider charges you in interest.
The consumer publication Which? has useful advice on choosing a credit card and provides weekly updates on its table showing the Best Rate Cashback card.
If you are interested in collecting air miles then its comparison table, which gives details of annual fees, special offers and extra benefits, might be of interest to you.
Anyone thinking of taking out expensive credit card insurance should look seriously at the alternatives. For example income protection insurance is a viable alternative as you can add your various monthly outgoings including credit cards to the amount of your cover. An even cheaper option is to take Mortgage protection insurance so you know your mortgage is covered and then effectively self insure for your monthly credit card bills.