Credit Card Lowdown

Are You A Credit Card Junkie?

Credit cards are of great help, if used properly. They are a helping tool for borrowing short term money or to buy things online. But at the same time, if you don’t use the credit cards properly you can spoil your life and may end up becoming a slave to plastic money. There are four ways to know if you have become a credit card junkie? If you are not making full payments monthly instead clearing off the minimum payments only, you will find yourself very soon under a huge debt as interest will be charged till you clear your whole debt. If you are taking cash advances to clear other loans or expenses, you are in trouble as the interest charged on cash advances is very high and is charged from the day you withdraw the amount. Also if you have 3-4 credit cards, don’t use all the cards up to their credit limit.  Some times, some shops give you lower price for not accepting the credit cards; don’t avoid them as you need to balance the expenditure on your credit cards and the amount you can pay.

Credit cards if used properly can be a terrific way to manage your finances. Some may relish the idea of being able to transfer outstanding balances to 0% cards to provide time to sort out their finances.

Read More: Four Signs You're A Credit Card Junkie

What Credit Card Companies Should Tell You?

Credit card Companies try to convert you into a member by pre approved credit card offers. But be careful, there are lots of things which they should inform you but they don’t. Things like, if you are a good customer, the bank might be willing to reduce your interest rate along with dropping the annual fees. After seeing your past track, they are ready to make such changes for you. Do check when the introductory low interest rate expires and try to pay in full before the changes in the interest rate. Go in detail when you have been offered a very high credit limit. Check your grace period as in such cases the interest is charged from the day of purchase of an item. Also check the transaction fees applicable for cash advances. Keep in mind the more time you take to clear your balance, the more money you will be charged as interest rate. Ask for money saving tips from customer support staff as all this is not advertised. Be careful of extra fees paid for surpassing your credit limit. Also read the brochure in detail and compare various offers before opting for any card. Askmen.com reports:

If you don't pay your bill by the specified due date, the bank will backdate your interest charges. This means it'll charge you interest from the day a charge is posted to your account, not from the day payment was due. Some banks even charge interest from the date of purchase. If you can, pay the amount balance in full. If not, make an effort to maximize your payment by the due date.

Read More: Sneaky Credit Card Scams: Part II

Limit your Credit Card Count

You tend to keep on taking credit cards as each credit card company comes with a promise of lower rates, lower fees and added benefits. On an average most Americans carry between 5 – 10 credit cards, sometimes even reaching a level of 50. This can have a bad impact on your credit score. There is no thumb rule of deciding how many cards you should have. But the number depends on your spending and repayment capacity. Higher the number credit cards, higher will be the risk of negative impact on your credit score. You can have cards like Visa, Master Card, American Express or Discover as these cards are accepted by most of the merchants. If you pay very month without fail, go for cards with added benefits than low interest rate. Always keep your debt ratio below 50%. Ideally keep your balance low and pay off the money regularly. With too many cards in hand, you tend to forget the payment date and end up paying late payment fees. Bankrate.com Reports:

Steve Rhode, president of Myvesta, a nonprofit consumer-education organization, agrees, saying that each time you open a store credit card, 20 points are taken off of your credit score because he says, "Historically, store credit cards are issued to anyone with a pulse. They issue credit cards to people who otherwise can't get credit."

Read More: How Many Credit Cards Should You Have?

Increase in Credit Card Payments Due to Wireless technology

All the advantages of mobile point of sale are because of the vast cellular coverage. Wireless credit cards are the in thing now. You can even avoid the investment on hardware and can carry the plastic with your gadgets like PDA, cell phones etc. In the case of a wireless transaction, a credit or a debit payment can be made via desktop POS through the carrier networks. Small businesses can get the best of benefits from wireless.  The top reasons to go wireless are that It’s faster and cheaper. Your communication cost will reduce from $60 in case of a dedicated POS machine to around $ 15 with wireless service. It is portable and safer too as it allows you to obtain real time authorization and also reduces the amount of cash to be handled by an employee. You also get a lower discount rate from the card companies for going wireless.  It streamlines time keeping and payroll. It also improves customer service by being in touch with them. It can boost marketing and can help your website to take off. Bankrate.com Reports:

"Small, medium and large businesses, depending on the wireless solution, can all benefit," says Joyce Leiser, director of emerging markets for U.S. Wireless Data. "Whether it's a fixed location or mobile, there is no need to wait for a phone line

Read More: Wireless technology means credit card payments can soar