Card with points or cashback? Understand how to choose the best option for your pocket
Black, Platinum, colored, proximity: the market today offers a multitude of credit card options, and choosing the best one is good for your pocket. “The card is an ally, but it needs to be used wisely. Many of them offer monthly reports and apps, so consumers can monitor and categorize their spending, which makes it easier to manage their budget”
Another advantage of the card is the period between a purchase and the payment of the bill – which ends up working as a kind of interest-free loan. “It can also help consumers build up a positive credit history, which is essential for facilitating future financing and loans,” he points out.
How do you choose the best credit card?
Understanding your own needs and spending habits is the first step in choosing a credit card. “If you travel a lot, you may benefit more from cards focused on miles. If you’re a regular shopper, you could opt for cards with cashback.” We’ll explain the characteristics of the two main types of card:
Cards focused on points: in these, purchases are converted into dollars and turned into points which vary according to the card’s rules. For example: 1 point per dollar spent. Points are usually exchanged for miles.
Cashback cards: the dynamics are simple. With this type of card, part of the purchase comes back as a credit on the bill. This money can come in the form of a discount or deposited in a current account.
When comparing the available options, the expert warns that it is important to analyze the relationship between annual fees and the benefits offered.”You should ask yourself if the card’s advantages justify the costs and also understand the interest rates applied if you don’t pay the balance in full occasionally.”
Taking care to have a card
Just as a card can be an ally, if misused it can become a villain. “Having a credit card requires responsibility, and it’s essential to adopt a series of precautions to avoid financial problems“.
This includes using the card within your means and avoiding spending more than you can afford at the end of the month. “And whenever possible, avoid paying only the minimum bill. This is a major pitfall, as the accumulation can result in high interest rates and lead to endless debts.” Finally, the ideal is to avoid the temptation of several cards. “This can complicate the management of expenses and payments.”
