Credit cards are everywhere and now a part of daily American life. These tips will help you avoid common mistakes when dealing with your credit cards.
1. Pay all your credit cards on time, one missed payment can increase your rate from 12% to 30% or higher.
2. Make more than the minimum payment. The new CARD act proposes a 3 year repayment plan. Stick to that and you’re in better shape.
3. Annual fees are back in a big way. Even if you had a free card, you may see a notice that an annual fee has started. Remember to forward your address to all old cards because if the fee kicked in and they can not get a hold of you it will go to collection without your knowledge.
4. Keep balances at 60% balance to available credit ratio. That way you maintain a very high fico score and low APR offers will keep coming.
5. Teaser rates can be misleading and eventually come to an end. Time the end of the introductory rate with the amount you send in each month and calculate if you’re better or worse off.
6. Read the fine print on balance transfer. This turns into a game of hot potato and then at the end you could end up burned. They come loaded with a high transfer fees.
7. Watch the reward game. Just because you get 2% back does not mean it’s a reason to spend. Just over 50% of rewards are redeemed anyway. Go with the lowest APR if you carry a balance.
8. Read your statements. Often there is a notice or fine print that acknowledges a change usually not to your benefit. Also, check your rate each month. It typically is near the end of the statement. Call and contest high rates.
9. Credit card companies look for new ways to make money and the latest is very high international fees. Call ahead of time and get clarification if you use your card overseas what is the price.
10. Avoid cash advances as much as possible. There is a high transaction fee and higher interest rates. This is a huge red flag to your credit card company too.