How to choose the perfect credit card for your family

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Rewards, low interest, loyalty? Money gurus tell us the plastic pros and cons!

Credit cards are tricky no matter what time of year you swipe them. What is even trickier is figuring out what kind of credit card you should have in that wallet. We moms have so many decisions to make at any given moment, and adding this dilemma to the pile could be the one that puts Mama over the edge. We are here to help! Here, financial gurus offer their take on the pros and cons of each type of credit card.

1)    Rewards Cards

You’ve seen the ads. Promising points, airline miles, or cash back on every purchase, rewards cards are one of the most popular type of card out there. How can you tell if these cards are right for your family, and if so, which one?

Credit card expert and research analyst Robert Harrow thinks these are an excellent choice. “Moms and families will be best off with a flat rate cash back credit card,” says Harrow. “Whether you are buying something for yourself, outfits for the kids, or filling up your car at a gas station, a cash back credit card is your best bet for general, everyday spending. A decent, flat rate cash back card can act as a 2 percent discount on all your purchases. If you already have a lot on your plate, flat rate cash back cards are a great way to save without an added headache.”

However, Harrow points out that a miles or travel reward card could be a good option if you are planning a family getaway. “Paying for a family vacation is best done with an airline or hotel-affiliated credit card,” notes Harrow. “I recommend signing up for one right before you plan on paying for a pair of tickets or a hotel stay. If the charge is big enough, if might activate the card’s welcome bonus. Airline and hotel cards generally have the highest bonuses of any credit card on the market.

EverydayMe Arabia Tip: Whatever you do, don’t pay annual fees. These often sap most of the rewards you would normally get. There are enough good rewards cards out there that don't have them.

2)    Store or Loyalty Cards

You are at the checkout counter of one of your favorite stores. The cashier asks if you have their credit card and begins to rattle off all of its perks, including a pretty significant discount on the purchase you are making right that minute. It sounds rather enticing. What should you do?

If you shop at one store often for everyday items and groceries, McLain-Duer says having a store card can pay off. However, he says make sure use of that card comes with advantages, such as a percentage back on each purchase, as well as other bonuses like free shipping.

The main concern with loyalty cards is in the fine print of those agreements and terms. They often come with extremely high annual percentage rates (APRs) if you don’t pay off your bill in full each time. Carrying over a balance can end up costing you more in interest than you saved in discounts.

3)    Low- or No-Interest Cards

Credit card offers come in the mail all the time, advertising low or no interest for a certain amount of time. Sometimes, the offers are for up to 18 months of zero percent interest on balances. It makes a mom think that seems almost too good to be true. Is signing up for one of these cards ever a good idea?

Financial adviser and money coach Neil Palache says yes, in the right circumstance. “If you want to purchase a large appliance and need to pay it off, find a card that has no fees and has a zero percent deferred interest financing option,” he suggests.

Harrow notes these types of cards can be used to pay off other debt. “If you are struggling with credit card debt, you should consolidate your balances onto one 0 percent APR credit card,” says Harrow. “This will help pay off those expenses, while helping you avoid interest at least for a couple of months.”

Palache agrees, but cautions about strict use of those cards in that manner. “Debt that you’ve already accumulated clearly has to be paid off, but how do you do it? Assuming decent credit, one good way is to transfer balances to a zero interest card so that all of your payments are going towards reducing the principal balance.

Be careful though, as you must make sure that you don’t simply charge up the card that you

just paid off. Be committed to paying off the debt and never having it again.”

What kind of credit card do you have?

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