Credit Card Tips

by Pam on March 31, 2009

Choosing the Best Credit Card for You

Choose a card that gives you rewards every time you use it. Depending on your interests and goals there are a wide variety of rewards cards to choose from. Some financial institutions offer credit cards that pay out dividends based on the amount of money you spend. Don’t be afraid to shop around until you find the credit card that best suits your needs. Usually credit card companies offer bonus rewards for signing up. Note that you can usually get a rewards card without an annual fee so there is no need to pay to use your credit card. Also, be sure to take advantage of the in-store credit card offers that give you immediate discounts on your purchases. Make sure to pay off the balances before you owe any interest. Even if you never use the card again, it has saved you some money.

Once you have found the credit card that works for you, you need to know how to use it wisely and how to protect yourself from fraud. I have provided you with some tips below.

 

Use

1. Make sure to pay your credit card bills on time to prevent late fees, but more importantly, to preserve your credit rating. Be sure to at least pay the minimum payment every month. However, if you can afford to pay more, do so. It can take years to pay off a small balance if you continuously make only the minimum payments.

2. If you can, try to pay off your full balance each month. If you are unable to do so, minimize the use of your credit card until you can get it under control. Create a budget that will enable you to be conscious of where your money is going each month.

3. Always check your statements to make sure that you recognize all of the charges. If you notice any discrepancies contact your credit card company prior to paying your bill. The sooner you contact them the better as most companies give you a specific timeframe within which you can report any issues.

4. If you have more than one credit card with an outstanding balance, focus on paying down the one with the highest interest rate first and in the meantime continue to make minimum payments on your lower interest rate credit cards. Another alternative is to transfer your balance(s) to the card with the lowest interest rate so you only have one bill and you will see a significant savings in interest over time. It also never hurts to ask your credit card company if they will lower your interest rate.

5. Be honest with yourself. If you know that you have no discipline when it comes to using credit cards, do not use them! Many people who are aware of their temptation to overspend simply leave their cards at home when going out so they can’t do any damage. Do whatever you have to do, but help yourself by being honest.

6. Make your credit card work for you. Ideally, the best way to use a credit is to choose a card that earns rewards for every dollar you spend. To maximize the rewards benefits you then use the card for as many expenses as you can. Rather than your own money coming out of your pocket each day, you can have the money sitting in a savings account and earning interest. Then, when the balance on your credit card is due, you pay the balance in full. So, not only are you not paying any interest, you are earning interest on your money until you have to pay your bill. Even if you are unable to do this now, this is something to keep in mind for when you do have your credit card debt under control.

Fraud Protection

Here are some simple ways you can help to protect yourself from fraud:

1. Make sure to sign the back of your credit card as soon as you get it. Always destroy your old cards by cutting them into small pieces.

2. You can purchase a small paper shredder for your home to dispose of any of your sensitive personal information.

3. Never give out your credit card number over the phone if someone has called you! Only give out your credit card number if you were the one who called, and even then, make sure it is a reputable company. All too often people are caught off guard and end up giving out sensitive information without even thinking about it. Fraudsters thrive on just that so it’s always better to err on the side of caution.

4. If you suspect trouble or you have lost your card, contact your credit card company immediately so they can close your card. Often fraud occurs within the first hour after a card has been stolen. Once you inform your credit card company you are no longer responsible for any fraudulent charges incurred.

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{ 1 comment… read it below or add one }

Simran May 15, 2009 at 9:49 pm

Credit Card Selection:

There are plenty of credit cards out there. And a million dollar question is: what is the perfect card for me?? Is it really worth paying an annual fee for a card, when there are cards available with no fee? When I got my first credit card, my priority, like most people, was not to pay any annual fee. The bank guy tried to explain me the benefits and rewards associated with a fee based card, but all I understood was that he was trying to sell me something, I could get for free. So after using that no fee card for a good year and a half, after comparing features of a lot of reward based cards and after crunching a few numbers on my calculator, I decided to switch to a card which earn reward points for me and like just about everything in life, that came with an annual fee.

We all travel. It’s not a matter of ’íf’ but a matter of ‘when’ we travel. I was using my card for all living expenses like utilities, groceries, travel etc. My monthly bill was a little over a thousand bucks a month. So with a point-a-dollar math, I earned about 15,000 points a year, and in three years time, I had almost 60,000 points coz there was a 15,000 points bonus. Now that is all the points you need to travel to Europe from Canada. So paying $120 a year for a trip to Europe every three years, that sounds like the deal I will always be interested in. I am pretty sure, my next trip to Europe will be more fun coz its paid for by the bank.
Happy travel 🙂

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