For those of us out there who travel a lot, we’re probably quite familiar with the concept of credit cards. They can be quite useful while traveling abroad or even within our own countries. Of course, some of them also come with a myriad of perks that make our trips even easier. What might that look like?
Well, the main thing that we’ll be focusing on today is the possibility of getting free travel insurance with your credit card. However, this is far from the only perk available. If you’d like to learn more about credit card rewards and perk programs, then you’ve come to the right place.
Today, we’ll be talking about a lot of different bonuses that can come with opening a credit card, as well as the process of obtaining one. While it’s not overly complicated, if you don’t know what you’re getting into when you start, it can easily end up overwhelming.
Understanding Credit Cards
Perhaps the first thing that we really need to cover is this: what are credit cards, and why are they such a big deal? Of course, if you already travel, there’s a good chance you already know some of what we’re covering. Either way, you may just learn something new.
Here’s the thing: as adults, most of us should already have at least one credit card. They’re something that helps us build up our credit score, after all, which is an important little figure for all sorts of reasons.
Planning to buy a car? Well, you’ll need to have a high enough credit score to qualify for an auto loan. The same goes for houses and mortgages, although the requirements may actually be considerably higher there. Building up credit isn’t always easy, but having a credit card is one way to do that.
These cards are often referred to as a “revolving door” of credit, because as the holder, you are able to borrow money up to the credit limit. When you pay that money back, you are able to spend it again (in a sense). That’s how it’s sort of a revolving door.
Types of Credit Cards
In order to properly understand rewards programs, let’s first consider what the various types of credit cards are. Just bear in mind that we’ll be covering the potential bonuses and perks in more detail later on, so for now, we’ll only be offering them a cursory glance. You can look here: kredittkortinfo.no/reiseforsikring-kredittkort, for a proper examination of it immediately.
Rewards Credit Cards
These cards offer rewards such as cash back, airline miles, or points for purchases made using the card. As we mentioned, we’ll be covering the specifics of those further later on. For now, the important thing to know is that there are often some requirements to qualify for them, so if you’re interested in these, start thinking about that now.
Balance Transfer Credit Cards
These cards allow you to transfer existing credit card debt from one card to another with a lower interest rate or some form of promotional period. Typically, they are designed for and advertised with this purpose in mind. They can be handy if you’ve got a card with a high interest rate that you can’t pay off in full right now, but don’t want to accrue that super high interest.
Secured Credit Cards
These cards require a security deposit and are often used to build or rebuild credit. We’ve mentioned this already, but it can be really important to have a high credit score. By utilizing this style of card, you can build or re-build your credit score without having to stress about extremely high interest rates.
Just remember that the security deposit is typically going to be the amount of your credit line. Therefore, the balance probably is going to be pretty small (which is ideal, in these cases).
Low Interest Credit Cards
These cards offer a lower interest rate than the average credit card, making them a good option for those who carry a balance for extended periods of time. Unfortunately, if you have a lower credit score, they may not be overly accessible to you. Either way, they’re a solid option if you know that you need to spend a large amount with a credit card – this way, you won’t be paying excess interest on that balance as well.
Business Credit Cards
These cards are specifically designed for business expenses and often offer rewards or benefits tailored to business needs, which makes sense given the name. Overall, they’re a solid option for small businesses and entrepreneurs who are starting out, as well as larger companies and corporations who want to do things like track expenses and be able to acquire large volumes of inventory up front.
Something to keep in mind is that while credit scores don’t exactly matter on a business level (an organization doesn’t have a score), lenders may check on the scores of the business owner. Not anything to panic about, but good to be prepared for such a thing.
Student Credit Cards
As you may have guessed, these cards are designed for students and often offer lower credit limits, no annual fees, and incentives to help students build credit. They’re a useful tool.
Students opening them just need to remember that the benefits do tend to run out when you leave college, whether that’s upon graduation or if you end up taking a gap year. This can land you in a sticky situation if you aren’t careful. As long as you keep that in mind, though, they’re quite helpful.
Types of Rewards Programs
When we decide to apply for and open a credit card account, there are often going to be rewards programs that come with them. You can think of them as an incentive to use the card, beyond the normal idea of building credit. Let’s cover how some of that works.
For the travelers among us, you may already know just how important it is to have travel insurance when we are going abroad or even within our own country. Here in Norway, there are a lot of card options that allow us to bundle in travel insurance with the price of our tickets and other expenses.
In order to qualify, you will usually be required to pay for at least fifty percent of the trip (i.e. a plane or train ticket) with the credit card in question. When you do that, you’ll get travel insurance for free with that purchase. Just make sure that your specific lender or carrier offers these plans before you count on it.
Car rentals may work a bit differently, on a final note here. Typically, in order to get an insurance deductible for a car rental, you’ll have to pay it entirely with the credit card. Just some food for thought, of course, depending on the type of travelling you plan to do!
Cash Back Rewards
These programs offer a percentage of cash back on eligible purchases. There are various categories there, and often, this will depend on the specific card that you have. Some popular categories include things like restaurants or online purchases from local retailers, but you can explore all the different choices out there if nothing we mentioned piqued your interest.
Once you get the cash back, it can be redeemed as a statement credit, deposited in a bank account, or used to purchase gift cards or merchandise. Again, this will depend on your preferences, as well as what options your lender offers.
With points-based rewards programs, cardholders earn points for every dollar spent. Then, those points can be redeemed for a variety of rewards, including merchandise, gift cards, or travel expenses, just to name a few. They can be useful depending on what you earn points on, since some lenders will only allow certain purchases to be eligible.
Are Credit Cards Worth Your Time?
It can be a difficult call to make, to decide whether or not to apply for a credit card. At the end of the day, we’re the only ones who can think about our own spending habits and decide if we can own one responsibly. However, it’s important to have one in order to build credit.
For anyone who isn’t confident in their discipline, there are options out there still. Low interest or secured cards, for instance, are just some of the options. Don’t forget to find one with good rewards as well!