4 Biggest Credit Card Misconceptions For Retirees

Retirement


Credit cards are everywhere. Currently, 76% of his US consumers own at least one, and 31% own four or more of his. Nevertheless, credit cards are still misunderstood by many retirees, even though they have used them most of their lives.

What you risk is that you can lose hundreds of dollars a year on rewards, discounts and benefits. Credit cards have evolved rapidly, offering services such as insurance, cell phone protection, refunds and extended warranties. And the new technology that enables smartphone tap payments offers better fraud protection than other methods.

Here are four common misconceptions I see about credit cards.

Myth 1: Referral fees are a gimmick.

Due to the intense competition in the credit card industry (there are 85 issuers in the US as of this year), many companies offer so-called teaser interest rates that rise after a period of time (usually 12-15 months). It offers. However, these introductory rates can offer real value at a time when inflation is skyrocketing and interest rates are at his 15-year high. Perusing any reputable personal finance site will give you a list of dozens of credit cards that charge no interest on balance transfers. Card providers often charge a small fee to transfer balances, but if, like many retirees, you’re struggling to pay off your credit card debt, interest rates can rise. It is worth stopping the accumulation of fees.

Myth 2: All cards have the same benefits.

Earning rewards for purchases is a well-known benefit for cardholders. However, there are other valuable perks that are often overlooked. These include cell phone protection that provides refunds for lost or stolen phones, extended warranty protection that adds another year, and purchase protection for stolen or damaged items. There are many other advantages that can save Check your credit card website for details or call their customer service phone number. What you discover may surprise you.

Myth #3: Don’t pay off your credit card every month.

This is one of the biggest misconceptions. The idea is that paying interest on a regular basis will improve your credit score. it’s not true. Making payments on time and paying off balances in full or as much as possible has a big impact on your credit score. Additionally, consumers can save a significant amount of money by doing so. If you can’t pay off your balance in full, make sure you’re paying the most with the card with the lowest available Annual Percentage Rate (APR) that you’re eligible for and the highest APR.

Misconception 4: Using a card-enabled smartphone is dangerous because it can be hacked.

This myth is difficult to eradicate, especially since no payment method is completely safe from fraud. However, contactless payments such as Apple Pay, Google Pay and Samsung Pay are often the most secure credit card payments.

This is because contactless payments allow you to pay without sharing your card information with the vendor at the point of sale, thus eliminating one means of fraud. For example, let’s say you order takeout at a restaurant. If you pay directly by credit card, the restaurant will obtain your card information. However, when you pay with Apple Pay, only you, your bank, and the card network hold your card information, making it more secure.

That said, all methods have vulnerabilities, so it’s important to stay vigilant and check your monthly statement for suspicious activity.

play long game

Why do credit card issuers offer so many perks, perks, and protections? Partly, it’s because of competition. Not only are they competing with each other, but they are also witnessing a surge in the use of online payment methods such as his Venmo and Zelle by consumers, especially among younger generations who are addicted to smartphones.

Businesses are playing the long game, knowing that it takes time to earn money and loyalty from cautious consumers. That’s why they want the opportunity to help you. So let them.

Christopher Fred is Head of US Credit Cards and Unsecured Lending at TD Bank. He has nearly 30 years of experience in the industry and prior to joining TD Bank he worked at Citi, Goldman Sachs and American Express.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *