The Nation Newspaper

Tag: credit cards

  •  Ways Credit Cards Can Make You Rich

    You are probably used to (or more than used to) reading articles about how credit cards are at the root of your money problems. There’s probably not a single article about debt that hasn’t waxed eloquently about how improper management of credit cards can send you into a debt spiral.

    But how many articles have you read about the various ways credit cards can make you rich? If you were honest, you could probably count the number of times on one hand.

    And if you have never known that credit cards can be money-making tools, read on to find out just how they can make you rich!

    1.     Put Your Rewards to Work

    So, you have a cashback card that rewards your every spend. That’s great. Now instead of letting the money stay idle, why don’t you put it to work?

    It doesn’t matter how much you earn. Even if it’s a few hundred dollars, thanks to the power of compounding, your money will grow!

    Let’s assume that you earn a maximum cashback of $500 each year. If you invest it in an account that gives you a return of 5% p.a., in 7 years it will amount to $703.55. And if you invest the money in other financial products such as recurring deposits or even investing it in equity, your returns will only multiply!

    2.     Link Your Card to an Investment App

    So, you want to invest, but you aren’t the savviest investor out there. No worries. Thanks to technology, you can always link your credit card to an investment application like Acorns and then sit back and watch your money grow.

    How?

    Well, let’s say that you have decided to buy a coffee that costs $3.75. Spare change apps round up your purchase and invest the spare change in portfolios. So, in this case, the amount is rounded up to $4 and the difference of $0.25 is invested.

    So, each time you use your credit card, a small portion is invested. And before you know it, that $0.25 from a cup of coffee, will amount to hundreds of dollars!

    3.     Sell Your Points

    Have you ever had points that are about to expire sitting idle in your account? Well, if you don’t want them to go to waste, you could consider selling them. What exactly does this mean?

    Well, say your family member is planning to go on a trip, you can book the tickets using your points and exchange it for cash!

    Before you do that, though, you should remember that not all credit cards allow you to transfer your points to family members. And if they do, there may be certain conditions that need to be fulfilled.

    So, before you go ahead and transfer points, do read the terms and conditions that govern your credit card carefully.

    4.     Make Money via Stoozing

    Okay, so you are probably wondering if stoozing is even a word. And it is.

    In financial terms, stoozing is the practice of making money by borrowing on credit cards which have a 0% interest rate.

    Basically, you borrow money on your credit card and then invest it in high yield accounts. As a practice, stoozing was quite common before the 2008 recession, but it is slowly gaining followers once again.

    The important things to remember with stoozing are:

    • Only borrow on a 0% interest credit card. If it isn’t a 0% interest card, then you will probably end up paying way more in terms of interest than you will earn by investing the money.
    • Make sure that you pay the full outstanding amount each month on your card or you may not be eligible for the 0% interest.
    • And right before the introductory period for the 0% interest ends, make sure you pay up the entire amount you owe on the credit card!

    Before you go down this route, though, do go through the terms and conditions governing your card with a fine tooth comb. You don’t want hidden fees and charges to take you by surprise.

    5.     Earn Money by Saving Money

    If you use a credit card well, you can save money each time you spend. Using your card to spend on categories that it rewards the most, is the best way to make sure that you are getting the best out of your card.

    If you have a card that gives you rewards points, you can accumulate the points and redeem them for travel, retail, or dining vouchers. So, you essentially get to dine at a fancy restaurant at a discounted rate because you used your credit card to make grocery purchases!

    Some cards even offer ancillary benefits such as insurance on rental cars or complimentary extended warranty on any gadget you buy. Others will even insure your travels with complimentary travel insurance! All of this means that you don’t have to spend money and buy any of these!

    So, the next time someone tells you about how you shouldn’t get a credit card, you need to just show them this list!

     

  • ‘Madman’ held with 22 ATM credit cards

    ‘Madman’ held with 22 ATM credit cards

    A man said to be “mentally sick” has been arrested by Rapid Response Squad (RRS) operatives with 22 Automated Teller Machine (ATM) credit cards. Holders of such cards can use them to withdraw money from their accounts abroad. The debit card version is what is used at home.

    The suspect was also found with two mobile phones, a power bank and several bank tellers on Ozumba Mbadiwe Road on Victoria Island, Lagos, last Wednesday.

    Lanrewaju Jaiyeola, 39, was said to be acting in a suspicious manner and carrying a backpack when he was arrested.

    RRS quoted one of the officers, who arrested Jaiyeola, as saying: “When we sighted him, he appeared like a mentally sick man but we invited him for interrogation, he answered and responded normal to all our enquiries.

    “Afterwards, he started straying from the normal course of our enquiries. This raised further curiosity and we decided to check his backpack. What we found was startling; 22 assorted credit cards, one Nokia phone with flat battery, a Blackberry, a power bank, several bank tellers of recent bank transactions, and lots of invoices amidst numerous pieces of papers.

    “On further scrutiny, we discovered that eight of the credit cards were still valid. Out of these; three would expire in 2018, another three would expire in 2017 while two would expire in 2016. All the credit cards bore different names and banks.”

    On arrival at RRS Headquarters in Alausa, Ikeja, the suspect was said to have made “statements suggestive of somebody disguising as a madman to perpetrate crime around that axis.”

    According to RRS Public Relations Officer Femi Malik, there is still more to what they have discovered from the supposedly “madman”.

    Under interrogation, Malik claimed the suspect threatened the Investigating Police Officer (IPO), saying: “I will make life unbearable for you if you don’t let me go.”

    “It was at this point we realised that possibly he might be enjoying the patronage of some highly-placed people whom we believe he might be working for,” he said.

    It was learnt that the suspect was on police watch for about two weeks before his arrest.

    The suspect has been transferred to Special Anti-Robbery Squad for further investigations and psychiatric examination.

  • Fear over use of credit cards overseas from Jan.

    Fear over use of credit cards overseas from Jan.

    Banks are giving conflicting conditions to their customers on use of both debit and credit cards abroad. While some lenders banned completely, use of the cards abroad, others specified countries where the cards are acceptable, The Nation has learnt.

    The BBC quoted a source, saying the Central Bank of Nigeria (CBN) even ordered commercial banks to stop customers from using their debit and credit cards abroad. But the information cannot be independently verified at press time. A call to CBN Director of Communications was not answered.

    Standard Chartered Bank had in email to customers to this effect, stressed that their naira debit cards will no longer be used for international transactions, from January 1, 2016. It attributed the decision to limited foreign exchange supply in the market.

    It said the action, remains a temporary measure that will be reversed when the forex supply improves.

    Equally, Diamond Bank emailed its customers, specifying countries where their cards are acceptable. “Due to the current forex market realities, please be informed that your naira debit card has been restricted for usage in United Arab Emirates, China and African countries.  We encourage you to make use of the Diamond USD Dollar or Diamond GBP debit card to transact in any of the above mentioned countries,” it said.

     

     

    The bank also promised its customers unlimited annual spend from their dollar and Pounds Sterling accounts; increased daily spend limit across all channels like web, Point of Sale (POS) terminals, Automated Teller Machines (ATMs) among others.

    Such spends, it said, will not attract conversion fee on transactions done in card’s denominated currency and also chip and PIN protection.

    Analysts said the policy shift is part of government’s effort to stem the flow of foreign exchange out of the country.  In June, the CBN banned businesses from accessing hard currency to import about 40 items. The list included Indian incense, plastic and rubber products, soap and even private jets. The amount that Nigerians could spend on credit cards abroad has already been reduced by the banks.

    The fall in crude oil prices has reduced Nigeria’s dollar earnings, making it difficult for the CBN to fund imports. The Nigeria’s crude oil – bonny light, which traded at $110.2 per barrel in January 2014, reaching $114.6 per barrel by June of the same year, now trades below $37 per barrel on December 15.

    Boxed to a corner with the continued slide in reserves and crude oil prices, the CBN is thinking of ways out of the quagmire. One of the steps taken by the apex bank was tinker with its forex policies to conserve the reserves.

    In June, it banned importers of 41 items including toothpicks, private jets and rice and other items classified as finished products from accessing the official forex markets to fund their imports.

    Before then, it banned the sale of forex by banks to importers without the requisite shipping documents and directed that only imports, which are backed with evidence of shipment and other relevant documents, will qualify for purchase of forex at official rate among other restcitions..

  • FG bans use of credit cards abroad

    FG bans use of credit cards abroad

    The Central Bank of Nigeria (CBN) has ordered all commercial banks to stop customers from using their debit and credit cards abroad.

    Due to the latest development, banks are beginning to communicate the apex bank’s directive to customers through emails, noting that it is a “temporary measure”.

    The directive, which takes effect from January 1, 2016, will no doubt affect access to foreign online retailers.

    This is part of Federal Government’s efforts to obstruct the flow of foreign exchange out of the country.