Credit Card do’s and don’ts

In countries struggling economically, conditions are tough for the average worker. It is no surprise that in those types of situations there is an increase of credit card use such as Visa and Mastercard after savings have been exhausted or nearly so; if you are not in that situation, lucky you. The information in this article pertains to those in both situations.

Savvy users save money with them. That may or may not be possible given your situation but given enough options maybe some of the techniques outlined in this article may be applicable.


Credit Card do’s and don’ts

Combine your credit card debt with caution

Numerous credit card holders reduce the owed on their cards by using balance transfer credit cards. They offer 0% or low annual percentage rates (APR) on the balance that is transferred; however, this is for a limited introductory period. Be sure to complete a cost-benefit analysis first since many cards now contain a balance transfer fee.

Use Rewards cards but only if the balance can be paid in full

Be aware that rewards paid out are achieved by having higher interest rates than conventional cards. It is only logical to use this type  of card if the balance in full can consistently be paid per month.

Be cautious about engaging in credit card arbitrage plans

It is more difficult now to use any money-making schemes using credit cards. Until recently, it was simple to generate money by using borrowed money and directing them into a savings account with high interest that had an attractive yield. That is no longer because the yield is not there.

Pay over the minimum and pay on schedule

While paying more may hurt it pays off in the long run by chipping away at the balance owed and puts you in good standing with credit agencies.

Research before applying for a card

 Doing comparison shopping is prudent. Evaluate credit terms and conditions. Bear in mind that some cards will fit your spending methods better than others.

Do not have numerous cards

This may prevent from improving rewards on a card. As well, this may prompt you to charge more.

Refrain from using cards for an emergency

This is easier said than done. With children to feed and rent due the credit card may be the only source of money after savings have been exhausted. But if there is a nest egg set aside use it first to avoid the extraordinary interest charges that will add up quickly.

Talk to the credit card company about decreasing your rate

If you have a good credit rating, use it as leverage. Credit card firms like quality customers and want to keep them.

Forego cash advances using a card

Everyone knows the trap here. The convenience is great but pay back can hurt.

Warn of a chargeback

If getting your money back from a merchant is proving futile stop arguing and tell them your intent is to obtain a chargeback from the issuer of your credit card. Retailers shy away from increased fees to them resulting from a chargeback.

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