You should know about supplementary card

Supplementary cards: As the name suggests supplementary credit card is a card with an additional credit you can get on your existing credit card. When you ask the bank to issue a supplementary credit card on the basis of your own credit card (primary card), you can pass the supplementary credit to any family member like your parents, spouse, and children who are over the age of 18 years and the like. And, the number of supplementary credit cards which you can apply for varies from bank to bank, but it's usually in the range of three to five.

ReutersSupplementary cards can be used both in India and abroad to shop offline and online. Reuters
Benefits: Usually the benefits/ features of your supplementary cards are same as the benefits/ features you have on your primary credit card. Which means, a supplementary card can be used both in India and abroad to shop offline and online. The supplementary cards can also be used at an automated teller machines (ATMs) to withdraw cash as well. But, a few banks do offer supplementary cards with fewer benefits/ features as well. Supplementary swipes also gets the same reward points as your primary credit card.

How it works: Irrespective of the number of supplementary credit cards you take based on the primary credit card, to give to your family members, the bank will treat all the accounts as a single account. So, if your primary card limit is Rs 2 lakh, each supplementary card you apply for will have the same limit. So, in a way, if you have one supplementary card, the Rs 2 lakh gets divided between your primary card and the supplementary card you give to your family member. But the best part is that the primary card member has the option to not let the supplementary card have the same limit, instead allow a lower sub-limit on the supplementary card. So, if your primary card has a limit of Rs 2 lakh, you can set the supplementary card limit to say Rs 25,000. Sub-limits can be set even on ATM cash withdrawals.
In fact, you will get a single account statement being the primary card holder and hence you get to know the details of the supplementary card holder's transactions. This works well, especially if you want to give your supplementary card to adult children's, who are still students. Supplementary cards let parents monitor the spends on adult child's cards.

Cost: The cost you will have to bear for supplementary cards will vary from bank to bank. Some banks may offer up to three supplementary cards free. Others may charge a few hundred rupees while others may ask you to pay a joining fee as well.

Most important thing: The most important things to know about supplementary cards is that since you are the primary holder of the card, it's your responsibility to take care of the dues, since it's a single account. Also, know that the supplementary cards are also mentioned on your individual credit report.
Supplementary cards work very well when you want to give your aged parents or adult children who are financially dependent on you (like students). The best part is you can track their spend and also set the sub-limits as a primary card holder.

How to manage your credit card

Personal finance writers love to preach fire and brimstone about using credit cards. But credit cards are a powerful tool that can make managing your money easier…if you use them wisely.
This blog was born of stupidity. Between the ages of 18 and 25 I racked up nearly $80,000 of debt — much of it on credit cards.

I wrote this article in 2007 when I was still digging out of debt and struggling with how to quit my bad money habits, and I’ve since updated to include some things I’ve learned in six plus years of blogging about money.

Using a credit card responsibly isn’t a difficult concept. What’s important to remember, however, is that how you use credit cards is a habit. During your first few years of using credit cards, you will either develop good habits or bad ones. And you can take it from me, being reckless with credit cards is not only a hard habit to break — it can cost you thousands and thousands of dollars.

Using a credit card responsibly comes down to this:
Don’t charge what you can’t pay back at the end of the month.

If you must borrow money with a credit card to make ends meet, have a plan for paying the balance off ASAP.
How credit cards work

Understanding a bit more about how credit cards work can help you use them responsibly.
When you swipe your credit card, your bank loans you the money to make that purchase. The credit card then gives you a grace period — typically between 20 and 30 days — during which you can pay off that purchase before interest begins to accrue.

Grace periods are powerful because they give you the opportunity to use your credit card as a short but interest-free loan.

As long as you pay every penny you charged last month before the due date, you won’t pay interest.
Sooner or later, however, many people do not pay their credit card balance in full each month, turning their credit card into a revolving credit line. Finance charges (interest) then accumulate on the unpaid credit card balance each month.

Now the credit card companies make a little bit of money every time you use your card because they charge stores 1 or 2 percent of your purchase (called an interchange fee) to accept the card.
But the real money comes in charge you interest when you carry a balance — in other words, you don’t pay off your purchases in full at the end of the month. Credit cards typically charge interest rates between 10 and 20 percent. So, with interest at a 15 percent annual percentage rate (APR), if you charge $500 to your card that you don’t pay off for a year, you’ll end up paying the bank $75 in interest. If you owe $5,000 that’s $750 a year in interest, $50,000 is $7,500 a year!

The worst part is that credit card companies make it easy to get into this situation by only requiring you pay a small minimum payment each month, usually between 2 and 5 percent of your balance. So until you hit your card’s credit limit — the most the bank will let you borrow — it’s very easy to charge a large balance that’s difficult or impossible for you to pay off.  And, once you have it, the interest meter keeps running.
If you’re in this situation, you may be able to do a balance transfer in which you transfer your balances to new credit card that has a 0 percent APR for the first few months. This is a tool credit card companies use to get you to switch from one card to another — of course they hope that you will continue to pay them interest after the promotional 0 percent aPR expires.

Whatever you do, if you get stuck with a credit card balance you can’t immediately pay off, you need to make and follow a plan for getting out of debt like I did.
Developing the habit of paying in full

To use your credit card responsibly, you must develop the habit of paying your balance in full each month. That means keeping track of how much you’re spending on your credit card each month and ensuring you will have enough cash the following month to cover your purchases.
I find that using one credit card for nearly all of my monthly purchases not only makes this fairly easy, but has made it easier to manage my money, keep my checking account balanced, and track my spending.
With a very simple spending plan in place, you should know how much discretionary income you have left after required monthly expenses.
Let’s say your monthly spending allocation is $1,000. Now assume you’ll need $100 in cash for various transactions where using a credit card isn’t feasible. You know that you have $900 to spend for the month and can easily track how much you left to spend by checking your credit card balance, which most cards allow you to do easily and for free online.

At the end of your credit card billing cycle, simply pay the balance and start again.
Why use credit cards at all?

With the ease of using debit cards these days, why add a credit card to the mix if you’re not planning on paying over time? There are several reasons:
Rewards
Most credit cards offer some kind of rewards program, giving you back about one percent of every dollar spend in the form of cash, gift certificates, or travel. Although I don’t recommend using credit cards just to earn rewards, they are a feature you don’t get with cash or debit cards.
Security
With growing concern over the ease of credit and debt card theft and fraudulent charges, having your credit card lost or stolen is a simpler fix than if the same happens to your debit card. In both cases you won’t have to pay for fraudulent charges, the difference is if a thief snags your credit card no money actually leaves your bank account.
Building Credit

Every month you pay your credit card bill on time, you’re building your credit history and improving your credit score, which will save you money in interest rates on every big purchase you make down the road, from your next ride to your first house. If you never use a credit card you could find yourself in your thirties and unable to buy a home!
Simplicity

Using a credit card for your monthly purchases eliminates the need to balance your checkbook more than once a month. As long as you track your credit card spending (and don’t touch your checking account), your checking balance will always be where it should be.
Choosing a credit card

With hundreds of credit cards to choose from, finding one can be daunting process. For one, the kind of credit card you use matters less than how you use it: as long as you pay your balance in full and on time each month, you won’t be charged interest. That said, I maintain a curated collection of some of the credit cards I recommend that may help you choose a credit card that’s right for you.

 Read more at: http://www.moneyunder30.com/how-to-use-a-credit-card-responsibly

redit card provides adequate insurance protection can lead you to purchase

In the hot summer season, it is very easy to get a adequate insurance for your rental car. But not knowing whether your personal auto insurance policy or credit card provides adequate protection can lead you to purchase duplicate coverage or drive off underinsured.

Many people aren't sure how much coverage they already have. About 42 percent of consumers said they were either "thoroughly confused or had only a rough idea about insurance coverage when renting a car," according to a 2007 survey from the National Association of Insurance Commissioners, or NAIC. Of those who held credit cards, around 24 percent said they weren't sure if their credit card provided insurance benefits for car rentals.

CREDIT CARD SEARCH: Compare features on credit cards.

To avoid making a costly mistake when you rent a car, research your existing coverage before taking a vacation. Call your insurance agent and the credit card issuer of the card you plan to use. Ask which types of coverage you have and what the limitations are. Benefits can vary among cards from the same issuer, so inquire about your specific card.

Which types of rental car insurance should you worry about?

Types of coverage
Jeanne Salvatore, consumer spokeswoman for the Insurance Information Institute, or III, says there are essentially four types of coverage for rental cars, but two in particular are must-haves.
"The most important coverages are the liability and the collision damage waiver. You don't want to make a mistake with either one of those," she says. If you don't have either coverage through your auto insurance or credit card, it might be wise to purchase them through the rental car agency.

1. Collision damage waiver. The collision damage waiver or loss damage waiver, abbreviated as CDW or LDW, protects the rental car against theft or damage.

"Many credit cards will include some level of collision and theft protection," says NAIC president Jane Cline. To use this benefit from your credit card, you have to use that specific card to charge the rental and decline the CDW or LDW offered by the rental car agency.

Cline warns that in most cases the benefit would be secondary to your personal auto insurance. In other words, secondary coverage would supplement your car insurance, which could lead to increased premiums if you have to file a claim.

Cards that provide primary coverage would shield you from increased premiums with your insurance company. For example, Premium Car Rental Protection from American Express offers primary coverage for theft or damage to the rental vehicle at a flat fee of $24.95 per rental period.

advertisement
A CDW or LDW may also include coverage for costs that occur after an accident, such as towing charges, storage and "loss-of-use" fees, which compensate the rental agency for the amount of time that the damaged car is out of service for repair.

Find out from your card company or auto insurer if the CDW or LDW covers such fees and how it verifies them. For example, MasterRental Insurance for World MasterCard cardholders requires the consumer to get a copy of the vehicle rental location or class-specific fleet utilization log from the rental agency.

What will you do with your excellent credit

If you have excellent credit (your credit score is around the 720-850 range), the chances are you already know it. You always pay your bills on time, and you are very unlikely to carry a balance on your credit cards. In return for your responsible nature, you are deluged with offers for more credit cards. Overwhelmed and disillusioned with all of these choices, many of you are content to remain loyal to whichever card you had been using for years. It's easy, comfortable, and hassle free to use the same card in perpetuity. But by doing so, are you betraying the sound principals of financial management that earned you your excellent credit score? (See also: Surprising Things That Can Kill Your Credit)

Snap Out of It!

Those with excellent credit are likely to be using their cards simply as a method of payment, and they may be earning some additional rewards. Nevertheless, this practice is akin to storing money in a bank for safekeeping, without concern to the returns being accrued on your investment. The reality is that like savings, credit card spending should also produce a competitive return. Although saving is always a preferable activity to spending, those with excellent credit are leaving money on the table by not attempting to maximize the returns on their credit cards.

The Ways to Earn High Returns on Spending

The best way to compare credit card rewards is through the percentage of value earned per dollar spent. For example, 1% cash back is the bare minimum that you should expect from any reward card. If you are earning that amount or less, it is as unwise as closing on a mortgage with a higher APR that what is available. The two most common ways to earn credit card rewards are in the form of cash back or loyalty points such as frequent flier miles. If you are earning points or miles, you should assign a value to them in order to assure you are receiving the returns you deserve. The more value you earn per dollar spent, the better you are doing. Finally, there are a few cardholders who do have excellent credit, but may carry a balance from time to time. These people should always carry a credit card with the lowest APR on the market.

The Best Cards for People With Excellent Credit

Each of the cards on this list are only offered to those with excellent credit, but they offer very high rates of cash back or points. There is no one card that is perfect for everyone, but each has its unique advantages that appeal to different types of cardholders.

Chase Sapphire Preferred® Card

If you have the excellent credit to qualify for the Chase Sapphire Preferred® Card, then you'll have some great rewards to look forward to as a cardmember. Earn 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases worldwide. Get a 1:1 rate when transferring points to partner programs, or redeem travel directly through the Chase Ultimate Rewards portal and get 20% off. There are no foreign transaction fees on the card. This card has an annual fee of $95 that is waived for the first year.

Bonus offer: Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $625 in travel when you redeem through Chase Ultimate Rewards®. You can also earn 5,000 bonus points by adding an authorized user to your account and making a purchase within the first 3 months.

Click here to learn more and apply for the Chase Sapphire Preferred® Card today!

Capital One® Venture® Rewards Credit Card

The Capital One® Venture® Rewards Credit Card is for applicants with an excellent or good credit rating. Unlike other cards that only award bonuses to specific categories, card holders can earn unlimited 2X miles per dollar on every purchase, every day. Like all of their cards, there are no foreign transaction fees. There is a $59 annual fee for this card that is waived the first year.

Bonus: One-time bonus of 40,000 miles once you spend $3,000 on purchases within the first 3 months — equal to $400 in travel.

Click here to learn more and apply for the Capital One® Venture® Rewards Credit Card today!

Blue Cash Preferred® Card from American Express

Want to use your excellent credit to score some sweet cash back? The Blue Cash Preferred® Card from American Express offers 6% cash back at U.S. supermarkets (up to $6,000 per year in purchases), 3% at U.S. gas stations and select U.S. department stores, and 1% on other purchases. As a special offer, you can earn 5% cash back on up to $4,000 of eligible travel purchases made in your first 6 months, worth up to $200. Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit. There is a $95 annual fee for this card.

As a bonus offer, you can earn $150 back in the form of statement credit after spending $1,000 in purchases in your first three months. You also get 0% intro APR on purchases and balance transfers for the first 12 months. After that, your APR will be a variable rate, currently 13.24%-23.24%, based on your creditworthiness and other factors. Terms and conditions apply.

Click here to learn more and apply for the Blue Cash Preferred® Card from American Express today!

BankAmericard Cash Rewards™ Credit Card

The BankAmericard Cash Rewards™ Credit Card lets people with excellent credit earn some nice cash back rewards. Cardholders can earn 1% cash back on every purchase, 2% at grocery stores  and wholesale clubs, and 3% on gas for the first $2,500 in combined grocery/wholesale club/gas purchases each quarter, and Bank of America customers can even receive a 10% customer bonus every time they redeem their cash rewards into a Bank of America® checking or savings account. There is no annual fee on this card.

New cardmembers can earn $100 online cash rewards bonus after you spend at least $500 in purchases in the first 90 days of account opening. There's also a 0% introductory APR for 12 billing cycles on purchases, and any balance transfers made within the first 60 days; after that, a variable APR that's currently between 13.24% and 23.24% will apply. A 3% fee (minimum $10) applies to balance transfers. See terms.

Click here to learn more and apply for the BankAmericard Cash Rewards™ Credit Card today!

Citi® Double Cash Card - 18 month BT offer

The Citi® Double Cash Card - 18 month BT offer from our partner Citi rewards you twice. Once when you make the purchase. Then again when you pay for those purchases. You get 1% cash back when you buy, plus 1% cash back when you pay. There are no category restrictions and no caps. It's a simple and straightforward cash back credit card for those who don't want to engage in signing up for rotating categories or carrying different cards for different purchases. As a sign up offer, you can get 0% APR on balance transfers for 18 months. There is a balance transfer fee of 3%. This card has no annual fee.

Click here to learn more and apply for the Citi® Double Cash Card - 18 month BT offer today!

If you have excellent credit and you are not getting at least 2 cents in value for each dollar spent, or the lowest interest rate on the market, you need take a serious look at the cards on this list. As a smart consumer with excellent credit, you should always be receiving the highest return on not just your savings, but on your spending as well.

The meaning of credite cards

A credit card is a plastic card issued by a financial institution that allows its user to borrow pre-approved funds at the point of sale in order to complete a purchase.

Credit cards have a maximum amount -- or credit limit -- the user can borrow during a given period. The credit limit is pre-determined by the card issuer based on the cardholder's credit rating and credit history.

When an individual uses a credit card to make a purchase, he or she is authorizing the credit card issuer to pay the merchant on their behalf. Merchants are required by law to verify that the individual using the card is its rightful owner by obtaining proper identification via a Personal Identification Number (PIN), and/or a driver's license or state-issued ID card.

Merchants generally prefer payment by credit card because they are immediately paid by the card issuer – despite the fee the merchant must pay to the card processing company for each transaction.

[InvestingAnswers Feature: Credit or Debit? Your Choice Could Cost You 3%]

Credit card issuers require the cardholder to pay his or her balance in full, usually on a monthly basis. If the user does not pay the balance in full, the issuer adds interest to the balance, and this interest compounds for as long as the balance is outstanding.

As with credit limits, the cardholder's credit rating and credit history can influence the interest rate on the card. In some cases, the issuer can raise the interest rate. There is no federal limit on the interest rates credit card issuers can charge, although many states impose different caps. Many card issuers offer "teaser rates" that start out very low and increase over time.

How to Choose the Best Credit Card Offers

Issuers use several methods to calculate interest, and it is important for the cardholder to read and understand the issuer's disclosure statement in order to avoid unpleasant surprises. Many credit cards also charge an annual fee, late payment fees, fees for going over the credit limit, cash-advance fees and foreign-currency conversion fees.

WHY IT MATTERS:

Credit card interest rates are higher than personal loans or lines of credit. Many credit cardholders underestimate the time and money it takes to pay off outstanding balances -- especially when interest rates are high and minimum payments are low.

[InvestingAnswers Feature: Avoiding the Six Most Common "Black Holes" in your Family Budget]

It is important that cardholders not only use credit cards in moderation, but also take preventative action against identity thieves in order to protect their privacy and identity.

Credit cards allow cardholders to avoid carrying cash, earn frequent-flier miles, or accumulate other "rewards" that can be used almost anywhere around the world. With many credit card types, the cardholder can also get cash advances through ATMs.