Wednesday, 10 September 2008

Credit Cards Better than Cash?

Are credit cards better than cash?

That is a question that can now be answered as I found out some interesting facts this week.

Many credit cards now have a cash back system they offer. This means if you pay for something with these credit cards you will effectively get money back so the goods of services will be less than you originally pay with this system in place. In other words it is more expensive to pay with cash.

Some cards are giving an excellent deal with a staggering 5% cash back. Imagine, whatever you buy you will be getting 5% off the price you pay. A card that is giving this rate at the moment is American Express with their Amex Platinum Card with a limit of up to £4,000 spending during the first three months. This means if you use the full cash back credit you will be getting £200 back! The rate goes down to 1.5% after this initial three month period, but you can get another 3 months if your partner applies for the card after your first three months has expired. You will then get six months and potentially up to £400 cash back.

Don't forget, there are other credit card companies that also have these schemes, but not with such an attractive introduction offer. But any form of cash back is well worth considering as ironically the paying by cash alternative means you will be throwing away money.

So, with cash back offers now firmly established with many credit card companies as pulling power to entice customers, they has a genuine claim in credit cards being better than cash.

As will all credit, it is only cost effective if you pay your monthly bills on time. It is well worth getting a direct debit facility to pay the credit card bills automatically. This way you will always get the benefits of cheaper money.

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