Cash bonuses, free American Tourister luggage, free Samsung Galaxy tablet the moment you sign up for a credit card - what's there not to love? Take the luggage, spend the cash on your loved ones and no annual fee to boot for the first year!
It started with someone telling me of an $80 cash bonus upon sign up for a credit card - 3 cards = $240, easy money! And then there was a higher interest rate on offer for savings accounts with minimal monthly spending on a debit/credit card - why not? Then, there was the card that gave me free access to the swanky clubs (I may decide to stop by for drinks one day, why not?).
Fact is, I'm not a big spender. Yet, in the name of sign-on bonuses and cash rebates, I managed to acquire a total of 12 credit cards, 3 debit cards and 3 ATM cards - I only use 3 and the rest exist to plague me.
How many slots do you have in your wallet for cards?
I totally detest the inconvenience of thick wallets and would much prefer a money clip. As a result, the other 15 cards remain in my wallet at home or lie in a stack on my desk, or on my shelf, or in some bag I decided to use once and then stashed in the recesses of my cupboard.
Point being, unless you are an organized person, you'll have a hard time tracking your cards - which leads me to my next gripe.
You know that advertisement with the guy paying for lunch and holding up the queue because he did not have Visa payWave?
The fact that the cards I leave lying around can be "waved" for amounts less than $100 each time is disconcerting. How many "waves" can a bad person wave that my bank is willing to waive? (*hurhur*)
Not using Visa payWave or MasterCard paypass? How many sales assistants check to match the signature on the bill to the one on the back of the card? Are sales assistants hired based on their skills at detecting fake signatures?
3. Annual Fee
Yes, annual fees are waived for 1-year. Or was it 2-years? Or 3?
Once annual fee billing starts, most credit cards readily waive them when you call to request. What happens though, is that for the 15 cards that I do not use, I do not bother to open any mail from the credit card companies because chances are that they are just mailers offering ready credit.
Then comes a month where the bank decides to send me a statement with an annual fee charge and I will not see it and guess what?
4. Late Charges
If you are not living above your means, credit cards are mainly used for the convenience of online payments or for discounts on retail spending rather than the need for credit. Ironically, I have incurred late charges on so many occasions on balances solely pertaining to annual fees or for the one random transaction I made on a card I rarely use and forgot about - I can't put a number to the number of requests I've put in for waivers of late charges over the years.
5. Credit Score
If I were to make a guess, I would say my credit score is far worse than it should reasonably be due to the point above.
A large part of the problem with my credit score is due to me being disorganized. The ideal way would, of course, be to cancel unnecessary cards after the stipulated 6 months (or longer) required as part of the terms to getting sign-on bonuses but how do you decide which cards are worth keeping?
While I'm reflecting on my disorganized ways and the hassles I have brought upon myself over the years, I have come up with a list of 4 Steps to Choosing the Best Credit Card - whether in deciding if to cancel existing cards or to sign up for new cards (because you know you can't resist free luggage).