Credit Card Concerns

Several different credit card companies offer their customers incentives for taking their cards. These incentives can range from earning points for free trips to programs allowing them to pay monthly bills with their card. Picking the right card and being responsible is key to maintaining good credit standing.\n“Credit cards aren’t a bad thing – they serve a purpose,” said Robert McManus, branch manager of Chase bank in Bloomington. \nVery few people abuse their credit cards, McManus said. Credit cards offer people the chance to build credit and get something in return, such as reward points.\nMcManus said a woman in his branch uses her card to pay monthly bills and then writes one check to the credit card company. Her rewards allow her to get cash cards for each one of her kids to use as spending money for vacation.\nHowever, McManus said if a person decides to use his or her card for monthly bill payments, it is important to find out if there will be any hidden fees from each individual company. For example, an electric company could have a service they use that charges the customer for it. Instead of just treating the card as a purchase, the individual service could take a cash advance on the credit card. Therefore, it is important to call to find out how the process will work.\nAmerican Express is one credit card company that allows customers to use their card for monthly bill payments. Sarah Meron, spokeswoman for American Express, said the program is available to any customer with an American Express brand card. \nMeron said American Express offers an award-winning membership rewards program with a variety of incentives for customers to use. Members’ rewards can earn points for travel, shopping, jewelry, televisions and much more, she said.\nMichael Courtney, School of Health, Physical Education and Recreation branch library coordinator, said he has three credit cards that offer rewards. One card offers a reward points program that is one point for every dollar spent. \n“You are able to redeem accrued points for either items out of their catalog, such as watches, stereos and iPods, or gift cards from certain merchants like Best Buy,” Courtney said.\nCourtney said he can also receive travel incentives such as money off of airfares and hotel and car rentals. His other card is a “travel rewards” card that earns points based upon travel-related spending. This third card is a straight $1 spent equals one frequent flier mile, which goes into his frequent flier account. \nAlthough some credit card companies now allow their customers to pay their rent and monthly bills, such as water and electric, McManus said people make the conscious decision when they want to use their card and for what reasons they use the card. Using a credit card to pay monthly bills is not necessarily a bad thing because rent and monthly bills are considered purchases, and therefore there is no hidden interest attached.\nMcManus said it is important to build credit and be responsible while doing so. This means paying monthly bills on time. The more responsible people are with their cards, the lower their risk is to creditors, he said. Lower risk equals a better interest rate on purchases such as cars and housing. \n“Your money takes care of you, so you need to take care of your money,” McManus said.