| |
The
following tips are basic principles about
obtaining and using
credit cards
that can save you some serious cash and keep you
out of debt.
10. Have at Least One Credit Card for Emergencies
– While we highly recommend having a rainy day
fund for emergencies rather than relying strictly
on credit cards, having a credit card with a low
interest rate
“just incase” is a good idea.
9. Rewards are not so Rewarding – Rewards can be a
good thing, but only if used correctly. Rewards
cards typically have a higher interest rate than
regular credit cards, with the value of the
rewards justifying the extra expense. The rewards
are not usually as valuable as you may think.
Typically the value of the reward is around 1 cent
per dollar charged and often the rewards expire at
the end of the year if you don’t use them. If you
pay off your balance in full each month and charge
a lot they can be worth while, otherwise you’re
better off with a non-rewards card.
8. Have Two Credit Cards – If you do plan to take
advantage of rewards, we recommend you carry two
credit cards. The rewards card
for making your daily expenses that you will pay
off in full each month and a second card with the
lowest possible interest rate to cover any
emergency expenses when you won’t be able to pay
off the balance in full by the end of the month.
7. Shop Around – Don’t apply for the first
“pre-approved” offer you receive in the mail or
any for that matter. Do the research for yourself.
There are plenty of sites such as CreditorWeb.com
that allow you to compare hundreds of credit card
offers with a simple search. You’ll get the best
deal by shopping around.
6. Read the Terms – The terms and conditions are
the equivalent of the disclaimer you hear on car
lot commercials. It cuts through the hype and
reveals the true terms of the credit card such as
what happens when you miss a payment and what
you’re really getting from the rewards. Most terms
are not that long, usually around one full page,
it’s worth your time to read them.
5. Ask for a Better Rate – Once you have been a
credit card customer for a few months call them
and ask for a better rate. They won’t laugh at
you, they get hundreds of these calls every day
and if you’ve been a good customer it usually will
work. Credit card companies work hard to obtain
you as a customer and they will work hard to
retain you.
4. Pay Off Full Balance Every Month – All credit
cards have high interest rates
compared to other types of loans. You should never
plan to carry a balance on a credit card. If you
must make a large purchase that you do not have
the money for at the time, obtain a loan or a
revolving line of credit
from your bank. You will save a bundle on interest
rates.
3. Work with Retention Department – If you ever
feel you are being treated unjustly by your credit
card issuer, a simple threat to leave will get you
transferred to the retention department. This
department will be MUCH more helpful to you and
will usually do whatever it takes within reason to
get you to stay.
2. Do not get a Cash Advance – This is the second
worse thing you can do with a credit card, short
of missing a payment is getting a cash advance.
The cash advances
usually come with a very high interest rate. What
makes it worse is the fact that with most
companies this higher rate credit will not get
paid off first, or even in the order that you took
it out. They will apply your payments towards all
the lower rate purchases and will only begin
paying off your high interest cash advance will
all other items on that credit card have been paid
off.
1. Never, EVER Miss a Payment – This is the
absolute worse thing you can do with a credit
card. Not only will you incur a late fee, but your
interest rate will also skyrocket. In addition it
will be a negative blemish on your credit report
which can cause the rate on any other loans or
credit cards you have to increase as well as
insurance rates. It also makes you less likely to
get approved for future credit.
|
|
