Manage credit cards poorly and you could see your financial situation plunge into disarray. Manage them well and you can actually improve your credit rating. If you already have a credit card it’s important to give your card and its use a regular check-up. There is nothing better than getting a free 30 day grace period to pay your bills. You just have to make sure you are on top of your finances!
Keep An Eye Out On Your Interest Rate
In recent months many lenders have been raising their interest charges. What was a reasonable 9% when you first signed up might now be 12%. These sneaky credit card companies always find a way to extract the most from us as possible. If your interest rate has gone up, it’s worth calling your lender to ask why and to see if you can negotiate a lower rate. Every single time I’ve called my credit card company to ask for a lower rate, they’ve obliged. It just goes to show that credit card companies have a lot of wiggle room when it comes to negotiating. It also goes to show that credit card companies have fat margins and why they are so profitable!
If you’ve been a decent customer, who has made regular payments on time, be it full payments or partial minimum payments, the credit card company should be flexible in providing some reprieve from their current rate. If not, guess what? There are literally millions of other credit cards out there for you to choose from who will take better care of you, at least in the very beginning!
Look Online For The Best Deals
Investigate the market to see what other deals are available too; conduct research online using information at places such as Money Expert Credit to find out what else is out there. If you are planning on using your card for spending, lookout for cards with interest-free periods. You want to take full advantage of this grace period, but know that if you carry a balance during this time, the moment the grace period is over, you will get charged the full interest amount for that grace period.
Let’s say for example the grace period is 1 year, and the interest rate is 20%. You rack up $10,000 in credit card debt during this time period, with the plan of paying it all off on month 12. At the end of month 12, you only have $5,000 to pay off. Guess what? On month 13, you will have a bill for $7,000 and not $5,000! The calculation is simply ($10,000 X 120%) – $5,000! There is no free lunch if you don’t abide by the rules. Make sure you pay off the credit card within the grace period!
Match Your Credit Card To Your Lifestyle
A lot of people are attracted to cards by their rewards which match their needs or lifestyles. I used to have a home mortgage rebate card since I’m a homeowner. 1% of all purchases were annually used to pay off the principal in my mortgage. Some are frequent travelers and use their credit card for mileage points. Again, with millions of credit cards out there, there’s no end to the amount of rewards type cards. You get real benefits, so long as you operate within the confines of the cozy agreement, otherwise, the companies will rake you over the coals. Always pay off your balance every month in full!
Ask For Giveness
It’s easy to slip up, I know. I’ve missed payments before, even though I know that the payment is due once a month! Perhaps it’s my old age. What I’ve done as a result is put a repeating monthly calendar reminder two weeks and one week before my bill is due. It’s the easiest thing, which has saved me a dozen $25 late payments and hundreds in accumulated interest payments. If you still forget, just call them up and ask for forgiveness. The credit card companies generally have one late payment forgiveness card a year. Be ready to pay off the balance on the phone when they do forgive you though!
Conclusion
Credit cards are a great tool for tracking your expenses and paying conveniently with a 30 day interest free loan. Just don’t go crazy and think you’ll never have to pay your debt back. You will, and you will in spades. Use credit cards to your advantage, not the other way around!
Regards,
Sam
Hey Sam,
I’ve learned to not carry a balance on a credit card. So I use it and make sure I pay it in full every month. So I have no idea what my current rate is.
Also good tip on calling if you have late fee. I missed a payment on my Discover card cause I was in Taipei. I called and they were happy to take it off. They’d rather keep a customer than try and get a new one.
No idea what my current rate is! (I like it that way!) I’m a credit card deadbeat!
Great tips! Which reminds me I should check what my current rate is! My credit card has a flexible rewards program that I’ve used to get gift cards for gifts and to pay off bills and that’s worked out really well. I’ve definitely used the “sorry I never got my bill in the mail” bit a couple times when I forgot to pay in time and had a penalty. I normally always pay on time so I had the penalty lifted each time which was great.
I recently got gazumped with a new credit card (other one got unceremoniously canceled by the company). Instead of a home rebate card, they gave me this new Thank You Points Rewards card which I didn’t ask for, and a 10.25% interest rate to boot (from 8%)! Total crap! I’m not happy. Gives me motivation to never, EVER be late w/ my CC payments.
It’s stupid to not pay it off!