Wednesday, 3 June 2009

Credit Card Tips

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When you are issued a credit card check how long it will take to pay off a card's balance when you make minimum payments. You will find it’s a very long time and will encourage you either not to use your card unless you pay the full balance each month. Cards issued by banks you can get this information by calling the payoff information number.

  • A person carrying a £5,000 balance with an annual interest rate of 15 percent who makes no more charges and makes the minimum payment on time each month will shell out around £1,640 in interest and make payments for 10 years before the balance is paid off. That really does make you think!
  • If you have a credit card that awards points, the best policy is to redeem points sooner rather than later. The reason is quite simple; the redemption value is largely hidden and can be changed by the card issuer at any time.
  • Choose a reward that fits the type of spending you do, such as earning extra points for grocery, magazines or chemist purchases. Always make sure that the rewards you get does involve you having to spend more.
  • Consider cash-back cards. Cash rebates, they are pretty straightforward and there are no blackout dates.
  • Beware of hidden fees and read the fine print of the reward program's, policy, terms and conditions. Check for the expiry dates on points or miles and know that the current terms are subject to change with little or no notice.
  • A good tip is to be true to one credit card, this will maximize your rewards-earning potential. It is also good advice to use a card that has a low interest rate and no annual fee then simply do all your spending with that card to reap the most rewards.
  • Add you partner as an authorized user on your account to leverage all of your household card spending and increase your reward-earning power.
  • Just don’t bother with reward cards if you consistently carry a balance. Reward cards charge higher interest rates making them expensive. Another option is to get another card the lowest rate of interest you can find.
I hope these tips will give you an edge on credit card company tactics to try and get you to spend more and fall for hidden traps in rewards and cash back systems
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