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Best Master Cards Credit Cards
- Who Should Get a MasterCard?
- Pros and Cons of a MasterCard
- Tips for Using a MasterCard Responsibly
- Types of MasterCards, and Which One Is Right for You?
- What to Consider Before Choosing a MasterCard?
In your search for a new credit card, you’ll stumble upon various offers for MasterCards. These cards are popular worldwide, but interestingly, MasterCard doesn’t issue credit cards. Instead, MasterCard is a payment network that processes payments between banks and merchants. Therefore, you must go through a financial institution like a bank to get a credit card bearing the company’s logo.
Since different banks issue these credit cards, interest rates, terms and benefits can vary considerably. Through a detailed search, however, you can find a MasterCard that’s right for your wallet.
Who Should Get a MasterCard?
With so many credit card options available, there’s no rule that says you have to get a MasterCard. But if you’re on the hunt for a new credit card, there are reasons to consider this brand:
- You’re looking for a major credit card. One benefit of a MasterCard is that it’s a major credit card. And as a major credit card, these cards are accepted by many retailers worldwide. Whether you’re shopping in your local area or travelling abroad, pull out your MasterCard and make a purchase. But while this is extremely convenient, if you’re using your credit card in a foreign country, keep in mind that you might have to pay a foreign transaction fee. To save money, look for MasterCards that don’t charge these transaction fees.
- You’re looking to build your credit history. A MasterCard also comes in handy if you’re looking to establish your credit history or repair your credit history. As a major credit card brand, many banks and credit unions issuing these cards also report a cardholder’s credit activity to the credit bureaus. Paying your bill on time and keeping your debt low adds positive history to your credit file, and eventually increases your credit score. If you need a card for the purpose of improving your credit history, look for a MasterCard designed specifically for people who have no credit or bad credit.
- You’re looking to diversify. Getting a MasterCard also makes sense if you’re looking to diversify and get a different type of credit card. Maybe you already have an American Express or a Discover, but you’re looking for a credit card that can be used anywhere. Before you apply for a MasterCard, understand that applying for too many credit accounts in a short span of time can hurt your credit score. Every credit application reduces your credit score by two to five points. So, apply for one card at a time. If you choose to apply for another credit card, later on, space out applications at least six months apart.
Pros and Cons of a MasterCard
- Use the card for every purchase. MasterCards are beneficial because you can use these cards for any and every purchase, such as high-ticketed items and everyday purchases like groceries, gas, dining out, etc. This is perfect if you’re looking for an easier way to track spending throughout the month.
- Safer than cash. Using a credit card can also be safer than cash. Cash can be lost or stolen, and there’s a chance that you will never recover this money. If your MasterCard is lost or stolen, there are security features in place to protect you from fraudulent charges. Notify your credit card issuer if you can’t locate your credit card. Your credit card issuer will cancel your old credit card, issue a new one and then reimburse fraudulent charges. If you misplace your card but don’t believe it’s been stolen, you can also freeze your credit card temporarily until you locate it. This prevents someone from making purchases in your name.
- Use of emergency funds. Many financial experts recommended having a six to 12-month emergency fund. However, if you don’t have a cash reserve and you need immediate access to funds, a MasterCard can provide the resources you need—although you shouldn’t get into a habit of relying on your credit card for emergencies. Come up with a plan to increase your personal savings account. Set aside a little cash each paycheck, as little as $25. Your deposits will add up over the months, providing you with extra cash for an emergency.
- Bad credit options. Another benefit of MasterCard is there are cards for different types of credit. You don’t need good credit to qualify for a card. For that matter, you can get a MasterCard whether you’re a student or someone with no credit history or a bad credit history. The trick, however, is researching different cards to find one for your credit range.
You can run up high debt. One disadvantage of a MasterCard is the risk of ringing up high debt. Using a credit card calls for self-control and moderation. You need to come up with a monthly or weekly spending budget for yourself, and then commit to sticking with this budget. Overspending can result in huge debt, and since credit cards charge interest, you could end up paying high-interest charges.
Tips for Using a MasterCard Responsibly
- Don’t overspend. Frivolous and impulse buying can result in overspending. To protect yourself, don’t keep your credit card in your wallet. Only carry a MasterCard if you intend on using it for a purchase. Removing the card from your wallet reduces the temptation to purchase items you don’t need.
- Use a rewards credit card. If you prefer using a MasterCard for your monthly purchases, get a rewards credit card. These credit cards are perfect for heavy usage because you can earn reward points, miles or cash back for every dollar you spend. Once you accumulate enough reward points, there’s the option of redeeming these points for travel, gift cards, merchandise, statement credit or a check. To put it simply, you’re rewarded for using the credit card. Many rewards credit cards include annual fees, so compare costs to find a card that’s right for your budget.
- Never skip a payment. A MasterCard is also a tool for building your credit score, but only if you manage the card responsibly. Never skip a monthly payment and don’t pay late. Your credit card issuer will send a monthly statement, and you’re required to pay at least the minimum, although you should pay off your credit card monthly to avoid debt and interest charges.
- Minimize your balance. Self-control is critical with a MasterCard. If you don’t have self-control, you could easily max out your card. If you’re unable to pay off your balance in full every month, aim to keep your credit card balance below 30% of your credit limit. Debt is more manageable at this level.
- Know your credit limits. One way to avoid maxing out your credit card is to be aware of your credit limit. If you have multiple credit cards, you might lose track of which credit cards have what limits. This information is found on your credit card statement, or sign up for online account management and review your account information from your computer or phone. Signing up for account management lets you monitor your credit card usage throughout the month. Careful monitoring is one way to avoid overspending.
- Choose credit cards with additional perks. Cardholder perks vary by credit card, hence the value of shopping around and finding a MasterCard offering benefits that match your lifestyle. These might include free rental car coverage, free price protection or a free extended warranty when you purchase electronics with the credit card. Some credit cards even offer additional benefits such as concierge services and other exclusive travel benefits.
Avoid cash advances. Some MasterCard gives the option of cash advances. With this option, you can use your credit card to withdraw cash from an ATM. The cash you receive is deducted from your available credit line. But while cash advances are convenient, the interest rate on a cash advance might be higher than the standard interest rate on purchases.
Types of MasterCards, and Which One Is Right for You?
Since it is possible to get a MasterCard with no credit, fair credit, good credit and excellent credit, it’s important to understand the different types of MasterCards available to ensure you apply to the right type of card.
- Secured MasterCards
Secured MasterCards are ideal if you have no credit history or bad credit. These credit cards can improve your credit, but they do require a cash deposit. The amount of your deposit determines your credit limit. If you apply for a secured credit card, confirm that the credit card issuer will report to the credit bureaus every month. Also, make sure the company will periodically review your account and convert your secured account to an unsecured one, once you’re eligible.
- Unsecured MasterCards
Unsecured MasterCards don’t require a cash deposit. Instead, these credit card issuers base your credit limit on your credit score and your income. Typically, people with fair, good and excellent credit qualify for unsecured credit cards. There are unsecured credit cards for bad credit, but these cards aren’t widely available and often feature much higher interest rates.
- Business MasterCard
A corporate MasterCard is an option if you own a company. Use the credit card for business expenses, such as supplies, equipment and advertising. This is an excellent way for business owners to keep track of spending, and as a bonus, many business credit cards have higher credit limits. Still, you should only spend what you can afford to pay off to avoid unnecessary business debt.
- Rewards MasterCards
Consider how often you use a credit card and your spending habits to determine whether a rewards credit card is right for you. To benefit the most from a rewards MasterCard, you’ll need to use the credit card frequently. This helps you accumulate points for rewards, and heavy usage can help you meet the minimum requirement to qualify for a sign-up bonus. These bonuses award a lump sum of points or miles when you spend a certain amount within the first three months of opening an account.
Once you’ve narrowed down the right MasterCard, submit an online application. Apply only for cards matching your credit score, and enter accurate information. Typos and misinformation can delay the approval of your application.
What to Consider Before Choosing a MasterCard?
- Terms and conditions. Don’t apply for a particular MasterCard until you fully understand the card’s terms and conditions. Read the fine print on the credit card application, and don’t hesitate to contact the credit card issuer if you have questions. Terms and conditions include minimum income and credit requirements for the card, as well as information on interest rates, annual fees, foreign transaction fees and balance transfer fees.
- Rewards earnings potential. Make sure you understand how a credit card’s rewards program works. Some programs only reward cardholders with one point for every dollar spent, whereas other programs might offer two times points for every dollar spent. Compare cards to see which ones offer bonus opportunities to earn points. For example, some credit cards offer a higher cash back percentage on purchases in rotating categories. Additionally, inquire as to whether a credit card company offers experiential rewards, which let you live out dreams and use your rewards earnings to create memorable experiences.
- Security features. You should also compare security features to reduce your risk of being a victim of identity theft. Does a particular MasterCard have chip technology that protects your personal data? Additionally, has the credit card company taken extra security measures, such as establishing a zero liability policy or setting up an identity theft resolution centre?
- Online tools. Before you apply for a MasterCard, seek out banks that allow cardholders to manage their accounts online. This includes the ability to monitor your balance, pay bills and review other account information. Some banks even have a mobile app, making it easier to pay your bills and check your statement balance.
A MasterCard comes in handy if you’re looking to diversify your credit, build credit, improve your credit, or get a credit card that’s accepted by merchants worldwide. However, you must do your due diligence and choose a MasterCard with features, fees and tools that you find beneficial.