Credit Card Pros and Cons: Advantages (continued)

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Free merchandise. Many cards, especially around the winter holidays, offer merchandise bonuses in special seasonal mailings to card holders. I recently got a truly lovely set of crystal champagne flutes from one kindly bank for making $300 in charges on its card in December. And one card company promised to send me two free movie tickets for making nine charges in January. Who knows what the mail might bring next holiday season?

Everything is negotiable. Keep in mind that card companies spend lots of money to find new cardholders. If you are a desirable card holder (i.e., one who pays the bills and charges up a storm), they don’t want to lose you. Interest rate too high? Call customer service and ask them to cut the rate. Charged a late fee or a fee for a bounced check, perhaps because the mail was slow? Ask that it be waived. You lose nothing by asking. Very often you’ll win.

Financial Organization. A plus of credit cards (and in some ways the reverse of the privacy problems they bring) is that they can help you organize your business and personal finances. If you charge everything you possibly can, you will have an almost complete record, along with your checking account register, of where your money went. This can be invaluable at tax time. One businesswoman told me: “I charge everything on one credit card, keep the monthly statements, and get a categorized summary of my purchases from the card company at the end of the year [a service available on some premium cards]. This really helps me be organized, something I have to be now that I have my own business. Plus, I get frequent-flier miles on what I charge.” So credit cards can be exceedingly useful to you in organizing your finances. (And it’s certainly nice to get those frequent-flier miles, which can add up to a free flight to Paris .)

Personal Safety. Credit cards may reduce the incentive for muggers. After all, if folks don’t carry cash, why mug them? In fact someday you may not have a choice.

Consider Scan International Furniture of Rockville, Maryland, which recently introduced a no-cash policy at its stores. The stated reason was to stop robberies, and according to Russ Daily, Scan’s president, in HFN (Home Furnishing News), the no-cash plan is doing what it is supposed to do. Daily says that only about 15 percent of the stores’ sales were in cash and that he figured that most folks who paid in cash would change to checks or credit cards. Scan delivery drivers won’t take cash either.

If a customer wants to pay with a money order, Scan pays for the money order; or if the item is less than $20 and the customer doesn’t have a check or credit card with him or her, the clerk hands over the furniture polish or whatever, takes the customer’s name and address, gives him or her a stamped, self-addressed envelope, and tells the customer to send in the payment. Daily says that every single person has mailed in the payment.

If this no-cash, mandatory payment by check or credit card idea catches on, it may cut back on crime at stores that adopt it but it will certainly hurt your privacy rights. You may not care if you have to let the bank know that you buy Scandinavian-designed furniture, but you might really care about letting the bank (and anybody who cares to look into its computer, with or without your permission) that you bought, say, The Really Filthy Foot Fetish Picture Book at the book store that refuses your anonymous cash. This is a trend that probably shouldn’t catch on. Preventing crime is no doubt good, but so is protecting privacy; and if we lose our privacy at the furniture store, how soon before we lose it at the bookstore?

Credit cards have other advantages too...


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Monday, April 29, 2013 12:56