Utilizing credit card deals to the best of your ability
2007-07-23
Getting and using your credit card to the best of your abilities can be a complicated task but if you have patience and make smart choices, you can be right on top of things. The key to using credit cards wisely is below, read the tips for better credit card purchasing:
- One or two cards are plenty! Too many people fall in love with rewards program credit cards and zero percent interest credit cards and go out and get a bunch of them. Typically you will be fine with one or two cards. And anyway, the rewards will add up much quicker with one card versus two everyday!
- Read the fine print! Not nearly enough people heed this advice and they pay for it-literally! If you want the top credit card deals and you want to keep your excellent credit then you will read the fine print on your credit card applications to make sure you aren’t falling into a trap. Many credit card companies set up extra fees, surcharges and short grace periods on purpose to catch card holders!
- Keep your credit score high! Credit card companies love sending out solicitations in the mail to consumers. It is the best direct way to reach a large amount of people and people definitely respond.
Don’t feel good about getting these solicitations because most likely you weren’t selected out of thousands for a great credit card deal- you are singled out as someone they can get money off of!
Keep your credit score high by only keeping the cards that you can handle. Plus, read the entire terms on the credit card application carefully. Chances are they have some hidden costs in there somewhere.
Many credit card companies advertise with 0% interest credit cards but then on the inside it says, “Only for those with credit scores of over 750.” Don’t get suckered in!
- Introductory rates should usually be avoided! While lower interest credit cards are always a nice little bonus, especially the zero percent credit cards, it isn’t always a great idea to get one! Why? These cards usually come with an introductory period, typically between 6 and 15 months. Once this time is over your interest rate will skyrocket! It is better to just stay away from them in the first place!
- Variable rates can be dangerous! Most credit card companies operate off of a fixed interest rate plan. Fixed interest rates are easy to calculate and easy for consumers to figure out. When a credit card company comes to you with a new credit card deal that has variable interest, just walk away! The company probably has something up their sleeve because most consumers don’t understand these complicated rates.
- Looking for extra charges! When you read your credit card application carefully you will have a much better chance of picking up all the extra charges, surcharges and hidden fees. Many credit card companies throw in an annual fee in small print as well as late fees that are through the roof! Late charges, especially on lower interest credit cards, can be pretty severe so you should keep an eye out for it.
- Grace periods- what is yours?! Every credit card comes with a grace period; the trick is to figure out what yours is! Their grace period is simply the time allowed for you to pay your card’s balance off without suffering extra finance charges and surcharges. Usually a credit card will have between a 15 and 30 day grace period. You’ll have to get out a magnifying glass to find yours though- they are in pretty small type!
- Avoid ‘card jumping’! Credit card jumping is where a consumer switches credit cards quickly and often. It is usually when they are following after a particular interest rate. Many card holders who are card jumping are constantly looking for the next zero percent interest rate credit card once their introductory period is over. You don’t want to start doing this because it will hurt your credit. Each time you open and close a credit account your credit score is affected- negatively! Just don’t do it!
- Don’t pay just the minimums! You want to know the best way to get or stay in debt? Pay the minimum payments on your credit cards and only the minimum payments! By doing this you are just going to get hammered with interest rates that will soon put you way over your head!
Many card holders don’t know that credit card companies will soon raise their minimum payments after a certain amount of time too. While you may be paying only $15 per month now, it could soon turn into $100+ if your balance gets too high!
- Stick with a credit card deal, and nothing else! Many credit card companies will start selling your more and more credit card options once you get instantly approved for a credit card. The biggest extra that they offer you is credit card protection.
This protection is a percentage based figure that is often added to your credit card bill each month. It can easily add up to $40, $50 or $60 per year! This isn’t really worth it though because you will only be liable for up to $50 if someone steals your credit card and uses it to charge say, a wedding!
- Live within your means! Many people see their plastic credit cards as free money. It is just too easy to charge items to your card and forget about them for a while. After all you’ll never even see that purchase for another month! The only problem is people often are undisciplined and try to live beyond their means. This puts them in debt over their head and takes them years to get out of! Live on a budget and you’ll be fine!
- If you find a new card, go! Sometimes credit card companies come at you with new credit card deals that are just too good to pass up. Whether it means they are giving you a great credit card rewards program or a high percentage of cash back rebates, some card companies give you a great deal and you may want to consider closing your current card.
While it isn’t wise to continually jump from card to card it is wise to upgrade every once in a while! But be sure to check with your current credit card company because they will often match the deal of a competitor. It doesn’t matter if it is an HSBC or Citibank card they will want you to be their customer- especially if you have good credit!
- Keep your rights in mind! If you are in debt or if you have financial problems then you need to know what to pay off first. Obviously keeping a roof above your head, paying your electric bill and keeping your phone on is pretty important.
This should come before paying your credit card bill but make sure to not fall too far into debt. If you have to, call your creditors and explain to them your situation. They may be able to help you out by lowering your interest rates or taking away charges.
