Great Ideas for Your Credit Cards
By Catherine
BillSavings.com Brief: Most people think of credit cards as a way to spend money, not save money. If more people used credit cards responsibly, plastic cards wouldn't be much of a problem. Money saving credit card tips will help you control your spending and live within your means. Learn more now.
For better or worse, credit cards are here to stay. Most people have more than one and use them quite regularly. Like anything else, there are responsible ways to deal with credit cards and irresponsible ways to use them. Staying informed, asking questions, and living within your means are just a few of the credit card tips you’ll find here to help you get control of your credit card spending and make them work for you.
- Try debit instead--Debit cards are a great alternative to credit cards. The main difference between debit and credit is that the purchase you make with a debit card comes from your checking or savings account. A credit card purchase creates a balance on your card and accumulates interest, which can become costly.
- Less is more--Get rid of the credit cards you don’t need. The risk of identity theft and poor credit ratings go up with every card you open. Determine which companies have the best interest rates and which cards you use most often and close the rest. The fewer the cards, the easier it is to keep on top of them and manage your payments.
- Retirement changes things--When income stops coming in, that doesn’t mean that your bills stop accumulating as well. You should be putting more of your income into emergency and possibly long-term health insurance. Pay off your mortgage if possible. Then make sure you are paying off your credit cards, starting with the highest rate first, in order to enjoy more financial freedom.
- Check into transferring balances--Sometimes it’s best to consolidate all your cards into one, especially if the interest rates are too high to pay off your balances in a timely manner. Realize of course that there are transfer fees and other costs, but if it will save you money and help you pay off your debt sooner, then do it. And don’t forget to pay more than the minimum.
- Leave your savings alone--It’s tempting sometimes to use savings to pay off high interest credit card debt. If you don’t have six months worth of money tucked away somewhere in case of an emergency or job loss, resist the urge to spend it on credit card payments. Rather, transfer balances or rework your budget in order to make higher payments each month.
- Doesn’t hurt to ask--If you are concerned with your interest rate, call customer service and request a lower one. Check out the prime interest rate before you call and use that information when negotiating. Take notes during the conversation and always follow up with a request in writing. If your credit card company doesn’t act in a way that satisfies you, threaten to take your business elsewhere. Find a better deal with another company and then close the original account before transferring your balance to the new card. Then pay it off.
- Smaller and more often--Switch from larger monthly payments to smaller biweekly payments. When a little extra money falls into your lap, use it to make extra payments on your credit cards. If you can, make the minimum payments twice. Your debts will slowly, but surely, disappear.
- Understand the details--Credit card statement can get confusing. Grace periods, paying the minimum due, and late charges are just a few parts of your bill summary. Make sure you understand what you are reading so you can make good choices and pay off your bills sooner rather than later. You should know what happens if you go over the limit so that your credit stays good and payments don’t go up.
- Stay informed--You probably receive a ton of offers in the mail. The perks sound great, such as 0% APR, low transfer fees, and a lot of bonus points. Not all of them are for you. Read the fine print and research offers online to make sure they are the right direction for you to take.
- Know yourself--Are you an impulse shopper? Then perhaps a card with low interest rates is the best idea. Long-term planners would do good to have a card with rewards and bonus points. Everyone is different and most of us have our own set of challenges and strengths. Find a card that will work for instead of against you.
Credit card tips, however helpful, can't work alone. If you want to get out of debt and control your spending, commit to trying one of these credit card tips at least once a month if not more often. Help yourself get control of your debt situation.
1/15/2009
