Your Credit Card Rules of Use

Card Purchases

Credit cards allow you to order bargains via the mail, the phone or the Internet.

They also help in fighting vendors who provide you with faulty merchandise or false promises such as service warranties.

Travel anywhere nationally or internationally is a breeze with a credit card and so much more secure.

Annual fees and APRs

You should carry a card that has no annual fee, a 25-day grace period and a 12% APR.

Your introductory rate should last at least 6 months.

If your current card has an annual fee, call and negotiate. Most lenders will take the fee off if you threaten to take your business elsewhere.

If your current card’s APR is higher than 12%, call and negotiate. A solid track record with the card will be a great advantage in negotiations. Ask for a supervisor is you are getting nowhere with your initial customer service representative.

Lenders need to be reminded that they do make money off of you even if you pay your entire balance off each month. How? Merchants pay the lenders 1.3 % to 2.5% of every dollar charged.

Credit Card Payments

In a perfect world, we would all pay off our entire balance every month thereby avoiding nasty finance charges. I do this myself, but perhaps you have a hefty balance already.

The key is not to pay more than you can afford, but you need to stop using the card and commit to paying it off. Don’t spend what you don’t have.

This requires budgeting for those big-ticket items or life purchases. Impulse buys are the death of many budgets, think before you pull out that plastic!

If you know that you are going to be late with a payment, call and verify the late payment fee and add it into your check. You then avoid finance charges on the outstanding balance, which would be the fee itself.

What if you have many cards with outstanding balances? You should do some research into transferring your many card balances onto one if possible. Consolidating will ease the repayment plan.

You might have to dip into your savings if you are knee-deep in credit card debt. Remember that there isn’t any investment that guarantees an 18.3% return, so why pay more in interest than you are earning on your savings. Do leave some money for emergencies because they always arise when you least expect it.

This rule is the same with investing. Don’t invest until you have paid down your debt.

Opt-Out Marketing

Opting out of mass marketing with the "big three" credit agencies (Equifax, Experian and Trans-Union) is effective for 2 years. You tell the agency you want out and give them the appropriate information, however this must be in writing.

This is also valid for all your credit accounts, but you must opt-out yourself.

Bargain Cards

Bargain cards are rated on a regular basis in Money Magazine.

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