Saturday, June 23, 2012

6 Credit Card Services You Should Evade

Supplementary services on credit cards may sound appealing and even logical at times, but are they really worth having from financial standpoint?

Here are the six services that you should evade on your card.

Identity Theft Coverage

This service on your card is to prevent fraudulent charges after the card is stolen or used without your permission. It seems very attractive. However, this is not complimentary at all. As per the terms associated with the service, if the card is stolen, the cardholder has to pay maximum liability for fraudulent charges. This may be anything as per the charges norms concerned.

If you can use your card cautiously, you can avoid this service.

Missed Payment Insurance

This facility allows the issuer to put your credit card payments on hold for up to two years, if you lost your job or ran out of money. You will be charged for the outstanding balance on your card. However, this does not make any sense why you should take this service.

For example, are you sure if you ever be unemployed in future? Second thing, it is folly to believe you will not continue making payment for two years in future. Carrying outstanding balance never makes a good sense. Even your modest saving can help you pay off your balance. Hence, it is unwise and waste of money to have this service.

Credit Score Tracking

If you subscribe this service from your bank, you will be able to have 24/7 access to your credit score. This will surely help you stay updated with your credit score status. However, it is futile and waste of money. If you are getting monthly billing statement from the bank, you can know about your liabilities. Second thing, credit bureaus offer cost free access to know about credit scores. Apparently, you do not need to subscribe "credit score tracking" service when you can manage your needs with these cost free services.

Debt Consolidation

This service allows you reduce your monthly payment on your plastic money. However, you may end up accumulating more debts in due course of time. Thus, it would liable you pay hefty amounts plus charges to your bank. Debt consolidation may lower your monthly payment, it is unwise considering the consequence.

Credit Score Repair

Sometimes, credit card companies take advantage of cardholder's ignorance. This service exemplifies this well. It means, your bank will help you repair your credit score.

However, do not take this service as you can repair your credit score yourself. Just continue repaying outstanding balance on time to your bank and it will fix your credit score automatically.

Balance Transfer

This facility allows you transfer existing debt of one credit card to another one. However, the balance transfer process usually takes 7 to 10 working days. What if you miss the due date by the time your balance transfer is complete?

Therefore, if you can pay your outstanding balance in full before the teaser period expires, then do not take balance transfer service.

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