Which Card Benefits Are Right For You?

For many, a qualifying for a first credit card is a rite of passage, much like learning to drive or owning a first home.  It's important to remember that using a credit card can be more than just a way to delay payments and boost a credit history; using a credit card can provide cardholders with a host of benefits in cash, merchandise, travel and more:

• MERCHANDISE REWARDS - Many companies offer cardholder rewards that reflect the amount of money charged on the credit card.  Some credit card companies send out a quarterly catalog for merchandise that can be “paid for” using points accrued on the account.  Cardholders can use points for luxury goods like watches and handbags, electronics and computers, or even gift cards to your favorite stores (or favorite stores of family and friends, for gift-giving).

• TRAVEL REWARDS – Some credit card companies offer travel certificates for airlines, hotels, rental cars, or even cruises and travel packages.  By using your card, you accumulate points that can be traded in for travel rewards.  So paying for your groceries or gas, or even using your credit card to charge the expenses of one vacation could help pay for your next vacation!

• CASH BACK – For large purchases (or even small ones, which can add up significantly over time), it may be worth considering a credit card with a cash back incentive.  There are companies that provide their cardholders with a percentage of their purchases in cash back each year.  Some cards offer cardholders up to 5% of their purchases in cash back rewards, which translates to a $250 reward on a $5,000 purchase!

• AFFINITY - Credit card companies will often affiliate with an alumni association, university, sports team or professional organization.  Cardholders can obtain a credit card that represents an organization for which they have an affinity (which is where the affinity program name comes from!).  Cards might have a university logo or sports logo, which is easily recognizable when the card is used (and can become a conversation piece or a way to show your loyalty to your alma mater or favorite team).  And the organization benefits when they receive a percentage of the amount charged by cardholders.

• CHARITY – If you have a love for a particular non-profit cause, you can obtain a credit card that donates a portion of cardholder charges to a nonprofit.  From breast cancer research to animal welfare, there are cards that provide financial support to a variety of charitable organizations, and any charges you make help your favorite charity.

• SAVINGS AND COUPONS – If you find that you're doing a lot of your shopping at one particular store or chain, it could be worth it for you to apply for their store credit card.  Some stores provide credit card users with coupons that are exclusive to their cardholders, offering a percentage discount, free items with purchase or more.   Applying for a store credit card is often a simple process, completed in a just a few minutes when you check out.  The line of credit is available immediately, and many stores will even provide you a discount on the purchase you make when you apply for their credit card. 

• PAYMENT DEFERRAL – There are stores that offer payment deferral for up to a year or more on large purchases.  For items like furniture or appliances, this allows you to wait months before any payment is required, which can earn you interest on money you're saving, or give you a chance to save up for a big purchase that you really can't wait for (new dishwasher or oven, anyone?!).

Many individuals obtain credit cards as a way only to essentially “borrow” money that they can pay back at a later date.  But with some research and savvy shopping for the right credit card, consumers can find a card that offers them even more!