Credit Card Lowdown

10 Common Sneaky Fees Credit Card Companies Charge

According to Consumer Reports, Americans shell out $31 billion in credit card fees every year. Most consumers don't even know these fees exist until they show up on a statement. Don't get sucker punched; read on for an introduction to the world of sneaky fees.

1. Late fees: Most credit card companies impose penalties when you’re late in paying your bills. The nasty surprise here is that there’s not just a due date, but also a due time. If you’re late by even a minute, you may have to pay between $15 and $39.

2. Increased interest rates: Have you been taken by surprise by a sudden rise in your interest rates? Even if you've been a good customer with most of your cards, a late payment on any one of them could raise your interest rates on the rest.

3. Fees for not using your card: Maybe you want to put your cards on ice for a while. It's a good thing, but beware of the fees your issuer may charge for not using your card. It's true; you can be fined for not charging anything to your card during a specified period of time.

4. Transfer charges: If you’re thinking of switching over to an interest-free or low interest card because you’re having trouble with your payments, find out if there are handling fees. Some banks charge up to 3% of the transfer amount.

5. Cash advance fees: With cash advances, it's not just the interest rates that are high; the transaction fees are, too. You'll pay fees to your credit card company as well as the bank that owns the ATM you use.

6. Overseas fees: Are you packing your credit card as you travel abroad? Be prepared to pay 3% more for any purchase made during your trip. Two percent of the foreign transaction fee goes to your credit card issuer and one percent to either Visa or MasterCard.

7. Convenience check fees: If you use these checks, you’re not only hit with a 3% fee, but you'll also have to cough up $31 if the check is returned and $26 if you stop payment on it. Convenient, indeed.

8. No-balance fees: Some credit card companies charge you a fee for not maintaining a balance.

9. Low-interest fees: Did you think you got lucky with a low-interest credit card? Check your annual fees. Some credit card companies offer cards with low interest, but high annual fees.

10. Miscellaneous fees: It's the little things that kill. Watch out for replacement/multiple card charges, phone pay charges, statement copy charges and charges for points and rewards.

What's the moral of the story? Read the fine print. If your credit card has any of these fees in the contract, consider getting a different card. That is, of course, if they won't charge you a fee for doing so.

Little Known Facts about Credit Cards

Living without a credit card has become a near impossible task for people these days. Online usage of credit cards has gained momentum in the past few years. However, credit cards can turn out to be a boon or a bane for you. It depends on how you handle your personal finances. The article "12 Little Known Facts Every Cardholder Should Know" at The Free Geek gives 12 interesting (but little known) facts that every credit card holder must know.

Most of us hardly knows about the Universal Default clause, which could hurt us badly. If you make a late payment, the credit companies will consider it as your inability to handle personal finances. This practice is considered as the Universal Default clause. Under this clause, banks can raise your interest rates when they feel that you're a high risk for defaulting on any debt.

Are you aware of the FICO score? If you FICO score is less than 600, you may not be able to increase your credit line. Also, there is a risk that you will be relegated to a category known as "People with Bad Credit." This score will determine your future transactions and interest rate. Hence, you must know about it in details. The article gives many such important points that you must remember while managing your personal finances. This is a must read for every credit card holder.

Interesting Consequences to Missed Payments

-- Pushpa Sathish, Staff Writer

Credit card usage remains at an all-time high – UK payment association Apacs reports that £11.4 billion was spent in the UK in December 2006 – but information and common sense relating to their use are at rock bottom. Most consumers are unaware of the basic facts that will prevent them from sinking into the blackholes of debt, even though they use their credit cards a lot.

For example, did you know that even one missed repayment could end up costing you a lot more in interest charges alone? And if you’re one of the lucky ones enjoying a zero percent balance transfer, you’d better make sure you meet those payment deadlines. Or you’ll be left holding a debt repayable at the standard APR – sound advice from Rob Kenley, credit card head at moneysupermarket.com. The price comparison site estimates that one miss can end up costing you as much as £278.

Cut the Charges, Not the Cards

Credit cards – it’s a known fact that these deceptive pieces of plastic are most often the reason why people sink into black holes called debt. But you can’t deny the fact that they do prove useful once in a while, especially in emergencies or for online shopping. The trick to have your cake and eat it too – use credit cards and stay out of debt – is to use your cards with restraint and responsibility – only when you really need to. It also helps if you choose one with a low interest rate.

The next step in staying out of debt is to remember to pay off the balance on your card, not just the minimum, but the entire amount. Remember, the interest rates can kill you financially if you put off paying the balance on your card. Paying just the minimum amount will only send your debt escalating because of the interest owed on the balance amount.

And if you forget to pay even the minimum amount, you are liable to pay penalty charges. If you’re absent-minded or tend to leave things till the last minute, set up an automatic credit card payment system with your bank so that they pay the base amount of the bill as soon as it arrives every month.

Did You Know?

-- By Pushpa Sathish, Staff Writer

...That you will not be held responsible for charges made to a stolen credit card? Yes, this is true, but only if you report that it is missing at the earliest. Your card company will hold you liable for expenses incurred up to $50 if the card itself is stolen. If the crook has just got hold of the numbers, then, according to laws established by the Federal Trade Commission, you’re home scot-free, and don’t owe the card company a cent.

Losing It, Drop By Sweaty Drop

-- By Priya Jestin

I was taking stock of my finances the other day – yes I do it sometimes. Well and what do I see? I was spending around 10 percent more than my salary on a monthly basis. Now, 10 percent didn’t seem too much so I brushed it aside. Big mistake screamed my friends. They warned me that I was taking the shortest route to bankruptcy!

I thought they were being a bit too dramatic until I decided to prove to them that I could curtail my expenses if I wanted to. And that’s when I discovered something: cutting down on my expenses was proving to be next to impossible. Something like my weight loss program. I’ve tried for years to lose weight, but all I do is lose some, and gain some more back on. I learnt that credit is just like weight – gaining it is a cakewalk and losing it is a sweaty business!

But I am not chicken and I wanted to prove that I could, if I wanted, do something. So I took the drastic step of grounding my credit card. I locked it away and gave my mom the keys to the drawer. Yes, it was very difficult. But so is weight loss. And once you are on track, it surely feels great…you can wear all those great dresses you’d locked away. So also with your finances – when you are in control, you can splurge every now and then. Believe this: Every dollar makes a difference!

Secured vs Unsecured Creditors

-- By Priya Jestin, Staff Writer

When you are indebted to someone, it is good to know the kind of creditors you have. Generally speaking there are two broad categories of creditors: Secured and unsecured. A ‘secured creditor’ has a lien, or interest on your property, which s/he can use to satisfy the debt. Now within this category, you will find voluntary liens like mortgage or security interest in a car. Then there are involuntary liens on property that result from unpaid taxes or a judgment.

An unsecured creditor on the other hand, has no interest in any particular property of the debtor. So, apart from a bankruptcy, the only way unsecured creditors can get their money back is if you, the debtor pays up voluntarily. If you decide not to pay up, your creditors will have to sue you, get a judgment against you, and ask the sheriff to seize some of your property and sell it to satisfy their claims. 

Senior With Cards? Reconsider Please

If you are over the age of 65 and have numerous credit cards to your name, there's one question that you probably need to ask yourself: "Do I need credit at this age? Most seniors, after a certain age, generally don't buy a house, refinance their mortgage, or purchase a new car on credit. Courant.com reports:

Having a great credit score is important if you're going to be doing any of these things. If you're not, having great credit is mostly a point of pride (and does preserve your options in the future). If you have a dozen credit cards, consider keeping four of the oldest cards and canceling the rest.

Want to know more? Read on

How To 'Know' Your Card

You know, you really cannot blame the card companies. They ensure that they provide you all the details. Now it is up to you to search the needle of truth in their haystack of information. Now, if you are like me and most others, you wouldn't know much about credit cards except that you pay with them for something you purchase. Then you pay the bank at a later date with whatever the interest they charge. And, most important, try not to max the card.

Yes, been there, done that. But then a few questions began to nag me. How were they charging interest. How did they calculate the exact amount and how/ why did it change from person to person. Then there were the questions about outstanding balance, minimum payment... the works. Anyways, I must confess, all this had me a bit worried. So I decided to find out answers to my questions. And look what I found! Market-day.net reports:

Most people don't CHOOSE to pay a high interest rate. The bank decides what interest rate it will charge you, usually based on how much of a 'credit risk' you are. They determine that by looking at your history of paying bills. If you've got a history of paying bills on time, then you'll qualify for lower interest rates. If you haven't ever had any bills to pay, or if you've had trouble paying your bills, that will show in your credit history, too. Since it's a little riskier to lend you money, banks will charge a higher interest rate.

Read more: Credit Card Basics – Understanding Five Main Credit Card Terms

Finding New Ways To Tempt Students

As 17 million college students make their way to campuses across the United States, there is one fear gnawing at the minds of University heads. Nearly a dozen states have made it extremely difficult for card companies to market on public campuses however, there is still the fear that young students will fall prey to their aggressive marketing tactics. Statesmanjournal.com reports:

But these steps belie a stark reality: Credit-card marketers are as aggressive as ever about reaching students. Some solicit students, by phone or e-mail, and flood their mailboxes with credit-card applications. Other marketers set up tables around heavily trafficked campus areas, hawking free sandwiches or pizzas to hungry students to get them to sign up for a credit card.

Read more: College students are a 'prime target' for credit-card companies

Your Low Interest Credit Card May Not Be So Low After All

Have you been duped into using what seemed to be a low interest credit card and were shocked to see the rates jump at the end of the period? You are not alone.

Thousands indiscriminately use their cards during the introductory period, believing that the rates are low. And then they are jolted awake by the bills. But there are ways to counter this problem. One of the first things you should do when going for a low rate credit card is read the fine print. Don’t get taken in by the rates. Read carefully before you accept. The best low interest rate credit card will charge a low rate of interest and have low annual fees; several purported low interest rate credit cards have an annual fee as high as $ 60. This can offset any savings that may accrue from the low rate of interest.

Credit Card Tips For Students

A recent survey by college debt financier Nellie Mae shows that students are getting smarter about their use of credit. But there is no stopping them from getting even smarter. What says? If you are a new student, here are a few tips that will help you tide through the initial rush of credit cards and teach you how to identify the card best suited to your needs:

Discuss with your parents: I know this doesn’t sound cool. But sometimes, it may not be such a bad idea to discuss the various card offers you get with your parents. Especially if they are going to handle your credit card bills.

Don’t get intimidated: They will not force you to take their cards but the representatives can be quite persuasive. So be on your guard and don’t take a card just because it’s been offered to you. Try to compare the card offered with other offers and then choose a good card. Try to get a card wit no annual fees, a decent grace period before interest is assessed, and a good introductory interest rate.

Read up: Very important. Before you take that card, read up as much as you can about the particular cards offered to you as well as about credit card debt and other such issues.

Take control: Just because you’ve got a credit card, you needn’t splurge all the money. It is important to keep a check on how much you spend and where. Only charge what you can comfortably pay off every month.

Pay your bills: This isn’t a free party – you just have to pay for what you purchase. So be careful with your use of the card and try to pay off your bills as soon as you get them. This way, you can avoid hefty late fees.

Credit Card Tips For Students

Fresh into college and what do you get --credit card applications stuffed into the goodie bags of newbie students. Not a bad proposition though -- students who need to buy books, travel home for Thanksgiving and enjoy the occasional pizza and wings with friends can certainly use the flexibility that credit cards offer. However, with a credit card, you need to be ALWAYS careful. MSN.com reports:

After a few years, in fact, the average new college graduate holds more than 6 credit cards and owes close to $3,000 on them, according to Credit.com, a credit education and marketing firm. Even without any new charges, that's a debt that can take almost 3 years to pay off, if you've got a 19 percent interest rate and monthly minimum payments of $120 a month.

Read more: Credit card 101 for college freshmen

Avoid Piggybackers

Heard of piggybacking? You’ve probably known of people who do it, but didn’t know it had a scientific name. Well, to get into definitions, it’s a situation wherein you let someone borrow the good credit history on your credit card by allowing him/ her to become an authorized user. And when you do this, you are opening the proverbial can of worms. Agreed, there are quite a few piggybackers who are responsible and will not lead to damage your credit history. But more often than not, piggybakcers are guys who are trying to either establish credit or get a boost to an out of shape credit.

Basically, when you add an authorized user to your credit card account, you are allowing the credit history of that particular card to be transferred to the new user's credit files. In this kind of an agreement, the authorized user can use the card, but does not have any contractual responsibility to repay any of the charges on the card. And this includes charges the user makes.

Secured Credit Cards Help Rebuild Bad Credit

Have a history of bad credit? Go in for a secured credit card. Sounds contradictory doesn’t it? Well, with a secured credit card, you can rebuild your bad credit only if you show a historical improvement to your payment history. Bestsyndication.com reports:

A credit card, if it is the only credit card you possess, could start improving a portion of bad debt only if you liquidate your current debt in a steady, reliable manner.

Read more: Rebuilding Your Bad Credit With Secured Credit Cards

High credit card debts? Use these tips

According to a recent report released by the American Bankers Association, most Americans are behind on credit card payments. This may not come as news to you, but the fact that the increasingly deplorable debt situation of most Americans is worrisome. According to the report, the months from July through September 2005 saw the number of credit card accounts 30 days past due — or more, reaching its highest levels ever.

Agreed that the times are bad, there is a recession on, and natural disasters have taken their toll and well, things are not as good as they used to be. And worse, another hurricane season is upon us, which means increased premiums on various types of insurances like homeowner’s, health and loans… the list is endless. But instead of wallowing in self-pity, we can do a few things to better our credit standing. One of the most important things to do is take control of our credit card debts. They are the most debilitating and difficult-to-pay-off-debts. But there are things you can do to avoid or wipe out credit card debt.

• Shop around for the plan that best fits your needs.
• Even before you accept the card, make sure you understand a plan's terms.
• Hold on to receipts to reconcile charges when your bill arrives.
• Protect your cards and account numbers to prevent unauthorized use. Draw a line through blank spaces on charge slips so the amount can't be changed. Tear up carbons.
• Keep a record — in a safe place separate from your cards — of your account numbers, expiration dates and the phone numbers of each issuer to report a loss quickly.
• Carry only the cards you think you'll use.

'Opt Out' of Credit Card Offers

Why are we so neck-deep in debt? Blame it on the mail. I’m serious. Haven’t you noticed the increased volume of credit card offers in your mailboxes recently? I have and so has Mail Monitor, the direct mail offer tracking service from global market research firm Synovate. And the findings are overwhelming: Over six billion credit card offers were mailed to U.S. citizens in 2005.

This type of mail volume gives consumers more options – customers find ‘test’ offers like new marketing strategies and programs, which they are tempted to try out. Nearly 60 percent of credit card offers in 2005 included some type of rebate or rewards program. This does give credit card users greater selection to choose the card that works best for them, but it also leads to a credit card glut, which makes consumers tired. So, what can you do to prevent this regular diet of credit card offers? You can ‘opt out’ or stop the major credit bureaus—Experian, TransUnion, Equifax and Innovis—from selling their name to mailing lists.

More Ways to Reduce Credit Card Debt

Credit card debt is a painful reality and we must find ways to deal with it. While throwing away your credit card or hiding it are options, we must look at more long-term solutions. Solutions that will help us save a thousand or more dollars on credit cards. Here are a few suggestions:

• Lower your credit card interest rates and bills by paying off your entire bill each month.
• Wherever possible, use a check, cash or debit card for purchases. This way, you cannot spend more than you’ve got.
• If your balance is too large and you are finding it difficult to pay it off, you can try this method – pay as much as you can. Then go in for a card with a low APR (annual percentage rate).
• Reduce credit card fees by getting rid of all but one or two cards, and by avoiding annual, late payment, and over-the-credit limit fees.

The CBA Route to a Student Credit Card

As a student you need to worry about one thing – debt, especially credit card debt. Being in debt has become a way of life for a majority of Americans, and we begin young – you’re just out of high school and if you want to study any further, you need loans and have to begin thinking of repayment. And there are other expenses as well like tuition, food, rent, and other incidental expenses. Only a student knows how difficult it can be to make ends meet.

And it is here that a student credit card is of immense help – if you are careful. These credit cards help you stretch your funds that little bit further. However, it is important that you find one with low interest and good terms, one that you can charge during the lean times and then pay it off when you're making money on your summer job. To ensure that you get a credit card best suited to your needs, just follow my CBA route:

Compare: if you’ve been in college long enough, you know that credit card companies go to any extent to advertise their cards. You may even find fliers or applications around campus. If you don’t find it that way, just do a search online. Ensure that you look only for student credit cards. These cards usually have lower interest rates and are more lenient on credit score, credit history...

Best of the Pack: When you compare the various credit cards, you will realize that some of them have mind-blowing offers while others are just so-so. Avoid the so-so ones. For this, you will have to know a little more about credit cards like interest rates, and the like. Choose one with a low interest rate, a longer grace period low, late payment fee, and if possible, no annual fee.

Apply: Once you’ve zeroed in on your credit card choices, fill out the application. This can be done on paper, online or on the phone. Apart from basics like name, address, etc, you will also have to provide a permanent address and phone number.

Get a business credit card in 3 short steps

Do you run your own business? If yes, you’ve probably thought about getting yourself a business credit card – a good idea since it makes it easy for you to separate your business expenses from your home expenses, a task that helps keep your paperwork organized and simplifies things at tax time. Here is the 3-step route to obtaining your business credit card. Hotlib.com reports:

You'll need basic information about your company's financial situation, including the name of your business, the tax identification number, the business address, the number of years you've been an owner, the number of employees, the nature of the business, the business' average annual income, and the amount in the business' checking account.

Read more: 3 Ways To Get Approved For A Business Credit Card

Of Credit Cards And Gas Pumps

Before I go into the topic for the day, here are a few statistics that I'm sure will be of interest to you.

• According to studies, the average consumer purchases about 530 gallons of gas a year.
• So if gas costs $3.00 a gallon then 530 gallons cost you a cool $1,590.00 a year.
• Or if you want to simplify it further, that breaks down to about $133.00 a month in gas.

Wowie. And here's the stunner -- If you purchase all this gasoline on your credit card and pay only the average minimum of 4 %, then by the year end you will owe an additional $400 with interest. Now this extra bit (BIT!!) of money is something you may not have had to pay if you had bought gas with money. It's the credit card that makes you pay SO MUCH MORE! Walb.com reports:

If you must use a credit card to pay for your gas, make sure to pay it off on time every month. With some credit cards you can earn reward points, build your credit, and not pay any more on gas than the high price on the pump.

Read more: Credit Card woes at the pump

Credit cards: Is the more is good theory true?

There are quite a few things about credit ratings that can confuse a person. For example, you have a high FICO score and you open a new credit card account with a bank, should you close any older account that you already have with the same bank if you want to maintain your high credit scores? Some people believe that there is no need to close old accounts since credit bureaus would give a person a higher score if he has had many credit card accounts in his credit history. This, even if he uses only two credit cards.

Reality is however, not that simple. Potential ‘open’ credit could affect your credit negatively. This is especially true if you plan to buy a house. Your lender may see so many ‘open’ credit lines and may not be too comfortable with that. Suntimes.com reports:

But as a matter of course, an individual probably doesn't need more than three cards -- and at some point, even if you don't use the card for a while, it's a mistake to leave it hanging around!

Read more: Credit history doesn't end with bankruptcy

Learn to select your trump card from a pack of credit cards

If you are a college student then you’ve probably been wooed by credit card companies with just about everything from free T-shirts to beach towels. Have you ever wondered why they love you so much? These companies can go to any extent to get you over to their side and use their cards. One of the biggest reasons is because you like to spend and don’t give a thought to tomorrow. That’s something that can wait until you get out of college… right? Well, the credit card companies bank on exactly this sentiment when they woo you. You are potentially lifelong customers who will spend, spend, and spend.

Some statistics to make you go cold in the feet – according to a study conducted by student lender Nellie Mae, the average college freshman carries over $1,500 worth of credit card debt. And by graduation, this amount more than doubles. And the worst part, even before you begin your professional life, your credit score is in ruins. So you spend the better part of your youth trying to repair the damage so you can buy yourself a home, a car… the list is endless. Not a fun scene to imagine.

Agreed you need them. I mean today we cannot do without credit cards, so the smart option available to you is to find the credit card that is best suited to your needs. You will get thousands of offers from issuing banks. Don’t get snowed under or tempted by the gifts. Be smart. Don’t go in for a credit card just because it announces zero percent interest for the first six months. It may sound like a good deal, but what students should keep an eye on when shopping for a new credit card is the annual percentage rate. These rates can reach as high as 18 percent! Next time, I will discuss more tips on how to choose your credit card.

Want to use plastic to settle online wagers? Don’t bet on it

If you are one of those who like to bet online and then use your credit cards to settle these bets, this news is a bit of a dampener. In an effort to halt mushrooming interest in Internet gambling, the House recently voted to forbid the use of credit cards for these purposes. However state-run lotteries and the horse racing industry are exceptions to this rule – could this favor have something to do with powerful patrons in Congress? Latimes.com reports:

The legislation would clarify and update current law to spell out that most gambling is illegal online, and would prohibit most payment forms from being used to settle online wagers.

Read more: House OKs Measure to Outlaw Credit Cards in Online Gaming

Three steps to help your teen stay debt-free

If you are parent to a teen, then you know what it means to have an outgo that is much larger than your income. Well, you really cannot blame your teen for all your expenses, but fact is, those ‘wonder years’ of your children do leave a dent on your purse. According to reports, teens spent around $160 billion last year. By the time a student enters freshman year of college, his/her average debt on a personal credit card is about $1,500. So how do you help them get over their have-now-pay-later attitude? You can either hope they grow out of it OR you can do something about it before your child drowns in debt. You can try a couple of these tips to help your youngster get back on track:

Teach them that money matters: Financial education seems to be passé today and most schools don’t bother with imparting it. So that means, the onus lies on you to tell your child that every dollar s/he spends has to be accounted for. Help them create a budget and learn to control their spending to remain within their means.

Supervise: It’s not enough to teach them to budget; you must also keep a watchful eye and ensure that they spend within their means. This is especially true if your child holds a part-time job and has control over his own money. If they earn a decent sum, you could even open a joint account with them and encourage them to save their money.

Be a role model: You can lecture them until you are hoarse or you can lead by example. Agreed that debt is an integral part of life today and you cannot escape it. But the least you can do is try to stay out of debt as far as you possibly can. If you show your teen that money matters to you and that you are scrupulous with it, chances are, they will catch on fast.

Credit Cards – APR basics

APR stands for Annual Percentage Rate. What it really indicates is the rate of interest that you will be charged in the event of you carrying forward your payable balance. This interest is also applicable if you transfer a balance from another card. The interest is expressed as yearly rate of interest.

A single credit card may have several APRs at one time. Different types of APRs that are generally applicable are as follows:

• Introductory APR – Here a different APR will apply once the introductory rate expires.
• Delayed APR – Indicates a promise from the company that for a limited time the said APR will be valid but after the expiry of the stated time duration, a different APR will be applicable
• Tiered APRs – When an individual has an outstanding balance that extends across different levels, he is likely to be charged tiered APRs
• Penalty APR – is charged when the card holder is late in paying the outstanding balance.
• Different APRs for purchases, balance transfers, cash advance – Here different APRs are charged in different cases.

Tired of credit card offers? Try ‘opting out’

Why are we so neck-deep in debt? Blame it on the mail. I’m serious. Haven’t you noticed the increased volume of credit card offers in your mailboxes recently? I have and so has Mail Monitor, the direct mail offer tracking service from global market research firm Synovate. And the findings are overwhelming: Over six billion credit card offers were mailed to U.S. citizens in 2005.

This type of mail volume gives consumers more options – customers find ‘test’ offers like new marketing strategies and programs, which they are tempted to try out. Nearly 60 percent of credit card offers in 2005 included some type of rebate or rewards program. This does give credit card users greater selection to choose the card that works best for them, but it also leads to a credit card glut, which makes consumers tired. So, what can you do to prevent this regular diet of credit card offers? You can ‘opt out’ or stop the major credit bureaus—Experian, TransUnion, Equifax and Innovis—from selling their name to mailing lists.

High credit card debts? Use these tips

According to a recent report released by the American Bankers Association, most Americans are behind on credit card payments. This may not come as news to you, but the fact that the increasingly deplorable debt situation of most Americans is worrisome. According to the report, the months from July through September 2005 saw the number of credit card accounts 30 days past due — or more, reaching its highest levels ever.

Agreed that the times are bad, there is a recession on, and natural disasters have taken their toll and well, things are not as good as they used to be. And worse, another hurricane season is upon us, which means increased premiums on various types of insurances like homeowner’s, health and loans… the list is endless. But instead of wallowing in self-pity, we can do a few things to better our credit standing. One of the most important things to do is take control of our credit card debts. They are the most debilitating and difficult-to-pay-off-debts. But there are things you can do to avoid or wipe out credit card debt:

• Shop around for the plan that best fits your needs.
• Even before you accept the card, make sure you understand a plan's terms.
• Hold on to receipts to reconcile charges when your bill arrives.
• Protect your cards and account numbers to prevent unauthorized use. Draw a line through blank spaces on charge slips so the amount can't be changed. Tear up carbons.
• Keep a record — in a safe place separate from your cards — of your account numbers, expiration dates and the phone numbers of each issuer to report a loss quickly.
• Carry only the cards you think you'll use.

‘Good credit card practice thanks to supervision’

Federal Reserve Chairman Ben Bernanke said recently that the U.S. central bank had managed to achieve good practice in credit card disclosure. This he said, was thanks to the supervisory tools that it already has in hand. Reuters.com reports:

"We've found that through guidance and supervisory oversight, we've been able to get satisfactory practices from the banks that we supervise," he told the U.S. Senate Banking Committee during testimony on financial literacy.

Read more: Supervision begets good credit card practice-Bernanke

Beware… your card’s never safe

Imagine yourself sitting at your desk in your office in say, Texas. And suddenly you get a call from your credit card company asking you if you were trying to make some big purchases in Italy. This is just a routine check by the card company, but you are all shaken. You check your wallet, and your card is lying snug in there. So how can someone in Italy try to do you in?

Credit card fraud is assuming scary proportions. Thanks to the internet, your personal data is never safe from ID thieves who are busier than ever before. Don’t believe me? Check these stats: According to federal and state authorities, ID theft is the country’s fastest-growing white-collar crime. It rose to prominence or should we say notoriety in the past decade. Federal Trade Commission statistics show that the number of people victimized annually stood at around 10 million. The federal Bureau of Justice Statistics reported in 2004, that at least one member of 3 percent of all U.S. households were victims of identity theft. And nearly three-quarters of these incidents involved credit and debit card frauds.

Once you realize how open our society has become thanks to the electronic revolution, you’d understand how these crimes are rising. Today we live in a world where everything including our tax records to Social Security numbers and credit card data are recorded on databases. These can easily be hacked and used unscrupulously by enterprising individuals.

Thieves find it quite easy to target the information embedded in ATM, debit and credit cards. They just need to break into or even compromise the equipment and systems that are used for processing payments. And the results are there for all to see. Credit card companies like Citibank and Visa that have been hit are reissuing their cards or using some other methods to counter this fraud.

Don’t skim over your credit-card agreement; READ it

Credit card companies can be very smart cookies. They don’t actually dupe you but bury you in so much information that you fail to see the bit that could matter to you. In short, they ensure that you have information overload so you miss the important point. Don’t believe me? Well here’s the case of a guy who got a letter from his card company. While the cover letter spoke about new special services like ‘same day payments’, etcetera, another document showed how the the terms of his credit agreement had changed. Fees for late payments, going over the credit limit, had been raised. And this was just the beginning!

And the worst part is that we cannot do much when these companies arbitrarily change the terms of their agreement with you. When you accept your credit card, you are asked to sign an agreement that allows the issuer to change the terms of the contract anyway they please, as long as you are properly notified. And how do they notify you? They ensure that these updated card agreements are typically full of fine print and go unread.

Keep sight of your credit card to avoid getting cheated

You’ve gotta give it to these guys. Every time the cops bust one method of credit card fraud, the scamsters are at the game again and find some other way of cheating people out of their cards and money. The latest one involves a man who is wanted for allegedly handing off customer credit cards to an accomplice. This accomplice then used a small, hand-held scanner to copy the card number and expiration date.

Now the Washington County Sheriff’s Office Fraud and Identity Theft team has issued a secret indictment for a former waiter at the Beaverton Azteca restaurant, who is possibly behind the fraud. Though not a widespread problem yet, if you do fall into this guy’s trap, you may end up in a lot of trouble. So it is best to keep an eye on your credit and debit cards at all times. Oregonlive.com reports:

"Paying cash may be making a comeback in popularity," WCSO Sgt. David Thompson said. "If the waiter has to take your card away from your view for processing, there is a chance it could be compromised." If a server is taking a particularly long time and going to excessive lengths to be out of sight, it’s all right to become suspicious.

Read more: Keep credit cards in sight, police caution

Dumb email doing the rounds

Have you by any chance received an email that proposes a very unique method of avoiding identity theft? The user is advised not to sign the back of his/her credit card! If you ask me, somebody ought to be really foolish out there to heed such advice. Wtopnews.com reports:

It is important that consumers understand that credit card theft is not identity theft. Identity theft involves a whole lot more.

Read more: Sorting Out Myth From Fact When It Comes to Credit Cards and ID Theft

With cards, debit is better than credit

If your credit card company is trying to subtly push you into using debit cards, then it is no coincidence. In the past couple of years, America has seen a subtle shift in consumer preferences. People are now opting to use debit cards as the electronic alternative to paying with cash or checks. The best thing about these cards is that they can be used anywhere a credit card is accepted. And unlike credit card users, customers can keep better track of their spending habits as every purchase and ATM withdrawal is posted on the monthly statement. Another added advantage is that debit card users need not pay any finance charges and will not have to worry about mounting debts as in the case of credit card users.

Now it is natural for you to think that if it was so beneficial, why are more people not being encouraged to use debit cards over credit cards. Well, realizing that making people use debit cards is more worthwhile, an increasing number of banks are now offering reward programs similar to those available to many credit card customers.

The CBFC route to getting a good credit card

Credit cards are an absolute necessity and most of us cannot do without them. I mean, I cannot remember a day when I left home without my cards. I’m sure you too feel lost without them. And yet, we seem to be so blind to simple credit card facts that will help us make our lives easier. Here is the CFBC rule to credit card land.

The first rule when you are ready to get yourself a credit card is to ‘Choose well”. Find those cards that offer the lowest interest rates and best services possible. Here’s a piece of advice: If you want lower fees and more importantly, lower penalty rates than banks, then go in for cards from credit unions. For those who are too lazy to do their research, try the Bankrate website to find cards with the lowest interest rates.

Many a time, you are taken in by the show and fail to see what lies beneath. In other words, you don’t notice the ‘Fine print’. Always watch the fine print for notification about changes in interest rates and fees. What often happens is that since these notifications come mixed in with other promotional material you could easily oversee it.

The next step in getting a good deal on your credit card is to stand your ground. Don’t let your credit card issuer get away after hitting you with a late fee or a rate hike. Negotiate for ‘Better terms’. You can even ask for a waiver. Many a time, issuers back off out of fear of losing your business.

And lastly, in case you feel you are being cheated in anyway, don’t hesitate to enquire or file a ‘Complaint’ against your credit card issuer. You can direct your inquiries to the U.S. Office of the Comptroller of the Currency at (800) 613-6743.

Seven steps to destroy credit card dependence

According to the latest estimates, Americans are now carrying $683 billion in revolving credit card debt – the outstanding unpaid balances on which people pay interest! And worse, according to a report by Cambridge Consumer Credit Index, only 13% of Americans with an outstanding balance could afford to pay more than half the balance. Moneycentral.msn.com reports:

If you’re overwhelmed with debt, the economy is giving you some breathing room now. Take advantage of the upturn to liquidate your debt. The next time around, you might not have this opportunity. There’s still a push in Congress for more stringent bankruptcy legislation. And if interest rates start to rise, the burden of variable-rate credit cards and mortgages will become heavier to bear.

Read more: Trapped by debt? Free yourself in 7 steps

Man uses stolen credit cards for Internet shopping spree

Here’s one more reason why you should be wary of identity theft. Recently, a Greenridge man confessed to using stolen credit cards to buy merchandise online and ripping off an Internet company for more than $18,000! Silive.com reports:

According to court documents, Terrill D. Johnson, 26, of Ilyssa Way, told investigators, "I wrongly took customer credit card receipts and used them to purchase a large amount of items for myself through the Internet -- Amazon.com -- on my computer."

Read more: Court papers: Man said he used stolen credit cards for Internet shopping spree

Canceling charges are difficult with automated payments

It is the modern amenities and facilities that make life extremely smooth. But in case of a small error, these facilities can make life extremely difficult as well. I know you are probably wondering why I’m trying to sound philosophical when we are here to discuss credit cards. Well, this little bit does have something to do with credit cards, or rather, the automatic payment facility offered by certain credit card companies.

If you are one of those who make use of automatic payments to pay your bills, then here’s a bit of news for you. It can be extremely tiresome to cancel such arrangements. I know this should actually be a cakewalk. Now there didn’t seem to be any hitch when you signed up for the service so why the trouble now? Well, all one can say is, ‘such is life’. According to certain debt counselors, lawyers and Better Business Bureaus around the country, the number of complaints from consumers is increasing considerably. Most of them complain about their inability to stop the recurring bills charged to their bank accounts and credit cards. And to make matters worse, these rules differ depending on whether your payments are linked to a bank account or credit card. Now, unable to stand the frustration any longer, people have even begun filing lawsuits against vendors or their banks to keep the charges from recurring.

Meanwhile banks, which have been bearing the brunt of complaints, say that they are unable to cancel recurring credit-card charges when a consumer has signed a long-term contracts like an extended gym membership. However, things are not as bad as they sound. In response to this troublesome issue, credit card companies Visa USA and MasterCard International say they've upgraded their systems. The new system is supposed to help banks and consumers more efficiently stop automatic payments.

Tiring Taxes? Try using your credit cards

Tax season is well upon us and the IRS is busy giving last minute tax tips to the young recruits. You can now charge federal income taxes to an American Express, Discover, MasterCard, or VISA account by contacting one of the two companies authorized by the IRS to process credit card payments. Thecitizen.com reports:

There is no IRS fee for credit card payments; however, the service providers do charge a convenience fee based on the amount charged. Once you’ve completed the transaction, be sure to write down the confirmation number and the amount of your tax payment.

Read more: IRS gives last-minute tax tips

Tips to better your credit score

A big debt, a bad credit score, innumerable loan repayments and a few financial mistakes – that’s all it takes for your finances to get to the point of no return. If you’ve realized that you need to do something about the situation before it devours you, then here are a few steps that will help you improve your credit score. Remember, these are not ‘get results quickly’ methods. Almost all these steps will take time and repairing a bad credit score will take a considerable amount of time and patience. So, banish all the delusions in your head and check out these simple steps.

One of the first things you need to do is obtain free copies of your credit reports. Ensure that they are accurate. In case there are any incorrect items, you can dispute them with the bureau that reported them. You should also get your credit score while you're at it.

Once you have an idea of how deep in debt you are, you can begin creating a plan to pay off outstanding balances like student loans and credit card debts. Most creditors live by the dictum ‘Better late than never’. They understand that you may have had your reasons for falling behind on your obligation. All that matters to them is the fact that you paid what you owed them.

Next in line are your current credit obligations. Don’t try to delay making payments on them – nearly 35 percent of your credit score is calculated based on whether you pay on time. So, if you pay on time, you are sending a message across to potential creditors that you can be responsible with credit.

Lastly, the most important thing is to have a lot of patience. Your credit score is not going to improve overnight. You will be required to make sacrifices and scrimp and save on money to make your payments. While you are repaying your debt, try to create a plan that will help you stay out of debt in future. This will ensure that your credit score remains good and that you never fall into such a trap again.

Do you know what’s on your credit card contract?

I agree that it isn’t much fun trying to make sense of the fine print on credit card contracts. But ignore them at your own peril because there are clauses in that contract which can drown you in debt if you are not careful with your card. Of course, if you don’t feel like reading those boring paragraphs, don’t worry, you are not an oddity. According to a recent survey, only 44 percent of us actually read every word of our credit card contracts.

But if you do read the fine print, then well, you can take pride in the fact that you have managed to keep on top of your finances. And if you already have one or a couple of credit cards, here are a few tips that will help you make the most of your card. Firstly, stay alert to changing trends. You must keep yourself updated to higher rates or changes in rewards programs. Courierpostonline.com reports:

Some issuers are raising the minimum monthly payment required. Others are switching fixed rates to variable rates that rise with short-term interest rates.

Read more: Credit card notices need careful read

Things a credit card user should know

Despite making credit card payments on time, your interest rate may be automatically be raised due to late payments on another credit card, car, phone or house payment, or even if the bank decides your debt is too high. This is known as the universal default clause which is increasingly becoming a standard clause in credit card agreements.

A credit score also known as a FICO score can be widely shared. It influences the amount you can borrow, the amount you pay for life insurance, whether you can rent a home and the interest rate to be paid on a credit card. Find out about your credit score and how it is tracked.

It is entirely upto the credit card company to decide the amount a cardholder is charged for a late payment even if it is only by an hour.

A majority of Americans pay no more than the minimum amount required which can be as low as 2 percent of their balance each month. Doing this can take years to clear your debt apart from ending up paying far more than the actual expenses incurred. Credit card info.com reports:

Even if you make your credit card payments on time, the credit card bank can raise your interest rate automatically if you're late on payments elsewhere -- such as on another credit card or on a phone, car, or house payment -- or simply because the bank feels you have taken on too much debt.

Credit Card Authorizations

On making a credit card payment, the merchant contacts the transaction processor which in turn contacts your card issuer to confirm the available credit is sufficient to cover the expense. All this occurs in seconds.

Once the transaction is approved by the card issuer, an authorization is created in your account. The implication of this is that although the merchant hasn't been paid the money yet, your available credit is reduced by the authorized amount. It takes about one to five days for the charge to be completed when the card issuer receives the transaction slip signed by you, and the funds are transferred to the merchant's account. In case the slip is not received for a certain period of time, the authorization expires and the amount on hold will be available again.

Confusion may crop up in cases where the total transaction amount is not pre-determined. A good example is hiring a car where you are free to extend the rental period or the number of miles. Here the rental agency will request authorization for an amount they estimate will be sufficient to cover the entire bill. Credit card info.com reports:

When you present your credit card as payment (either physically or by submitting the number by snail-mail), the merchant will typically contact their transaction processor, which will then contact the issuer of your card to confirm that there is sufficient available credit to cover the purchase (or cash advance.) This can be done in a matter of seconds as you standing at a store check-out counter.

Methods of Protection

There are certain precautions you can take to protect yourself from credit card fraud. As soon as you get a new card, sign on it immediately. When using your card at an ATM you should enter your PIN in a way that nobody will be able to memorize the numbers. Never leave your receipt behind at the ATM. Make sure you always shred your credit card statements, receipts and carbon copies before disposing of them.

The only time it's safe to give your credit card number over the telephone is when you have initiated the call. Cordless phones are particularly risky as there are radio scanners which are easily available that can eavesdrop on your conversations from a great distance.

If a credit card offer asks for money up front or doesn't disclose the identity of the card issuer, ignore it.

Always ensure that you get your card back right after making a purchase apart from tearing up any cancelled sales slips.

Maintain a list of your credit cards, their numbers and toll free numbers for each in the event of a loss or theft.

Examine your monthly statement carefully to make sure all the charges are genuine. Any error or unauthorized charges must be reported immediately to the issuer. Credit card info.com reports:

These tips are important and universal: Sign your card -- as soon as you receive it! (Obviously, this is only as effective as the clerk who's checking it.)

Things Your Credit Card Company Won't Tell You

No matter how religiously you make all your credit card payments and for how long, sooner or later you fall into the universal default trap. One slip and your privileges vanish and rates shoot up.

According to card companies, it's risk management. To consumer groups, it's about profit alone. The best way to avoid the problem is to pay all bills on time and in case of a disputed bill, get it sorted out before it reaches collection status.

Nowadays college-going kids are able to get credit cards as easily as a beer, asw they make good risks for creditors. Now card issuers are on the verge of tapping high school students. What parents can do to avoid their children from getting credit cards is to be extra vigilant about their personal information finding its way to databases. It's also a good idea to educate them on the evils of credit cards and monitor spending.

Rewards have become a major tactic for credit card companies to outdo competition. But benefit programs like frequent fliers frequently have a catch like massive interest rates and high annual fees. Work out how much you stand to gain from these programs and see if it makes sense to make use of them. Credit card info.com reports:

"We're just waiting for you to screw up." Many things can bump your credit card interest rate into the red zone, but nothing faster than what's called "universal default." You can make all your credit card payments religiously and for a long time, but fall behind on your electric bill and, suddenly, you're a deadbeat - who will be charged accordingly. Rates can change on short notice, from low and reasonable to 25 percent or more.

Dealing With Card Offers

Credit cards are famous to the point of notoriety about teaser rates to lure new customers. There are certain methods which work to their advantage at the consumer's cost.

Introductory offers of lower rates are only for a limited, sometimes very brief periods of time. You need to ask the card company the actual rate you will be charged once the offer period is over.

At times new purchases alone are valid for teaser rates. As a means of improving credit, that's what you need to avoid.

For transfer balances, teaser rates offer temporary relief from higher interest rates. But once the offer period ends, the regular rates may be higher than the one on your current credit card.

Many card users may be switchiung from one new card to the other to make the most of introductory rates for transferring balances. It may work for sometime, but sooner or later the debt is bound to catch up. Credit card info.com reports:

Credit card offers frequently use teaser rates to acquire new customers. These are introductory rates that last a few months before the regular interest rate kicks in. Some of the attributes of teaser programs include:

Hidden fees & how to avoid them

I am not one of those who tend to overspend and yet many times I notice that the amount payable on my bills seems to increase despite my extreme carefulness. This got me thinking and digging in detail into these bills. And was I surprised with what I learnt? Well, here’s the knowledge I gleaned.

Everything that we use in our daily lives has hidden fees attached. This includes our credit card bills to even the text messages that we keep sending each other. According to consumer reports, U.S. consumers pay nearly $216 billion in financial fees every year. That means you are paying nearly $800 in miscellaneous fees! And while they exist everywhere from cell phones to the Internet, guess who the biggest culprits are? Yes, you got it right, CREDIT CARDS. Did you know that we are paying nearly $31 billion every year in credit card fees? So, how does all this money collect? Simple, late payment involves fees up to nearly $40, if you are close to your credit limit, then the late fee can just push you over the precipice.

Then there are these enticing credit cards with low interest rates. Just cannot wait to get your hands on them? Wait till the rate gets hiked up to as much as 24 percent if you are late by so much as a nanosecond. Yes, I am exaggerating there, but you get the picture right?

Here’s my favorite one. Fine, you decide you’re done with your credit card and are not going to use it. So you lock it away and forget about it. What happens? You get slapped with another fee. At most card companies, you will have to pay around $15 if you haven’t swiped their card in six months! Here’s one trick to avoid this payment. Use your card for small purchases every now and then.

Avoiding Credit Card Secret Traps

Every credit card user should be aware of secret traps that credit card companies employ to suck money out of you. With fancy fees and interest rates they can land you into deep financial trouble.

One of these traps is the two cycle billing where you are billed twice, once for the current billing cycle on purchases as well as on the balance from the last billing period.

While most cards offer a grace period of a certain number of days before interest charges are levied, there are cards who don’t offer any. This means from the day you make a purchase, you will have to pay interest.

Cash advances almost always have no grace period, requiring you to pay interest as soon as you avail of the service. The interest rates too are substantially more than on regular purchases.

Your interest rate can be changed according to the whim and fancy of the credit card company as long as it follows 15 days after giving you a notification. Credit card info.com reports:

Credit card secret traps are the hidden side of plastic that keeps you in debt that is difficult to pay off. The main objective of credit card companies is for you to carry the largest balance you can possibly repay.

Taxes and credit cards don’t go well together

Recently, I informed you of how businessmen can now charge their taxes to their credit cards. This facility has already been availed to individual taxpayers who have made good use of it. What we haven’t yet discussed is the downside of doing this. Of course, there is a really big downside here and that is the heavy loss of money that you can incur if you do it. To put it simply, charging taxes to your credit card can be an expensive mode of payment, especially when the IRS offers an installment plan. Yes you heard me right there. The IRS offers enough benefits to negate any positive impact that you could have got from using your credit cards to pay taxes.

And now many debt settlement firms have begun asking their clients to resist the many incentives offered by companies to encourage them to pay taxes with their credit cards. You will be (or have already been) bombarded with rewards including offers of points, miles and many others just so you can charge the taxes to their cards. Some card companies even offer cash-back rewards.

Now here is the murky underside which none of these companies want to discuss: If you opt for this mode of payment, the service providers that process your transaction will charge a fee of 2.49 percent of the amount owed. So, if you owe $1000 in taxes, you will pay an extra $25 to the service provider. Then there are the interest rates and potential penalties in case you default on payment. So, what exactly is the benefit of using your credit card here when the IRS offers you the much better option of paying in installments?

If you still think that charging taxes to your credit card is a good option, then before you exercise this option, read the fine print that accompanies any special offer and develop a plan that will help you pay it off as soon as possible.

Some Fine Print Misses

When you apply for a new credit card chances are that you are not thinking about changing the credit card provider in the near future. But, if you are unhappy after using it and want to wind up the card and opt for a lower interest one - you are in for a surprise…

You are slapped with a big closure fee. Closure fees can go up to $50, depending on your issuer and you realize that you have unwittingly become contractually bound to pay the amount as early as the first time you used the card. That’s in the fine print, you missed.

Another fine print miss is the conversion fee. Each time you use your card abroad you will be charged up to an incredible 7 percent on the amount transacted. So watch out! 

Now, Let’s say you are an adventurer of sorts and decide on a long break at some exotic locale and plan to avoid the conversion fee by not using your credit card at all. You are playing safe you think but you may be clocking enough time to get the credit card company to charge you an inactivity fee. Oh yes, you are not charge-free by playing safe either.

This next point is the most incredulous... We all know about deadline for payment and liabilities for late payment and assume we got it covered. So, if you are one of those who pay on the last day and think you’ve made it without any late fee, you could be wrong. Late fee is charged even if you are a couple of minutes late! Most credit card companies allocate a particular time after which you could be charged late fee.    

On all these points, however, issuers may agree to lower the amount, leaving you elated about befriending these wily companies. But, hold on for a month and when your credit card statement arrives for the previous month you will be surprised with a higher interest as a punitive measure.

‘Interest’ing credit card tales of horror

Credit card jargon always seems very difficult to digest and most of us prefer to throw the contracts away or keep them for a time when we are in a better humor to read them. If you belong to either of these categories of people, then here’s a bit of a warning: This attitude may prove counterproductive.

Agreed credit cards are a boon in today’s world and that we need and use them almost daily, there are certain things that you need to know about credit cards. The knowledge that these contracts provide on the nature of your credit cards and the rules governing them, can empower you and help you know how much you’re going to pay and also, the consequences of not paying on time.

Here’s a lowdown on how to decipher credit card lingo. One of the first things you need to look out for are the interest rates. These rates are not only different; they can also jump at the drop of a hat. If you didn’t already know it, here’s another bit of news: Different interest rates apply to purchases, cash advances and balance transfers. Add to these the penalty rates that you have to pay if you are late in paying your bills and you have the ingredients for your fine balancing act. Oh, and if I forgot to mention, if you exceed your credit limit or your credit score drops, then too penalty kicks in. What fun!

And now visualize this scenario: You send a check well in advance to the credit card company, but due to insufficient funds or any other reason, your check bounces. What happens? Your interest rate soars through the roof! In some cases, this penalty rate has been known to reach an unbelievable 30% on mainstream cards.

A last bit of information on interest rates. If you thought you could pay off the highest-rate balance first, think again. According to the cardholders’ agreement issued by most credit card companies, your payments will first go toward the lowest-rate balance and will then later on be used for the higher-rate one. If you are the type of customer who carries a balance, then this is one way of keeping you in debt longer.

Beware of people who want to help you ‘repair’ your credit?

Is your credit score so bad that you may not qualify for a mortgage? Have no worry, for credit repair companies will ‘repair’ your scores for a fee. This controversial service has managed to transform a common white lie in the real-estate industry into a full-fledged business, and in the process, has worsened the situation for many people who are already deep in debt. Tmcnet.com reports:

In Ohio, a growing number of people are turning to them and feeling ripped off. Complaints to the attorney general about credit-repair companies have been on the rise, records show, including one filed recently against Creditlauncher.com by an industry watchdog.

Read more: Credit fix dismissed as house of cards: Critics pan trend toward attaching name to plastic with good credit history

Lowdown on Credit Card Use Abroad

You bought a bagpipe in your clan colors on your Scotland holiday and paid by credit card. Was that a wise move?  If the bagpipe you bought were a good one - you probably are right to use your credit card. But, cheap ones that have just home décor value would have been better purchased cash down.

I'd suggest all big purchases use your plastic it’s easier and the extra charge is probably worth all the trouble of carrying large amounts of cash in hand. However, for the rest of your purchases carry foreign currency. Credit Card companies are now charging for these transactions and you may have unknowingly forked out an extra 3%.

Foreign transaction charge, when it began, ranged around 1% of your bill and you did not actually see it, as it used to be included in the final amount charged to you. But, several financially meticulous travelers saw through this and raised questions. A slew of court cases began when travelers realized that their credit card company had charged these foreign transactions without prior disclosure.

Why are we being charged? Credit card companies charge us nowadays because the foreign merchants and their banks decided to do the currency exchange for you themselves and your credit card company and bank were given the already exchanged rate. So, this led to our home companies losing out on this money. To augment this loss, now credit card companies are out in the open with their foreign transaction charge of 3 per cent or so. Hey! Your highland bus trip bill just added a 3% to its original price.

Credit cards still gives you the best exchange rate when compared with ATM withdrawal or travelers’ checks or other ways all put together as they get great wholesale exchange deals. But, don't hesitate to march up to your credit card company and find out all the details of foreign charges before your next trip abroad.   

Choose your low interest credit card carefully

Have you been duped into using what seemed to be a low interest credit card and were shocked to see the rates jump at the end of the period? You are not alone. Thousands indiscriminately use their cards during the introductory period, believing that the rates are low. And then they are jolted awake by the bills.

But there are ways to counter this problem. One of the first things you should do when going for a low rate credit card is read the fine print. Don’t get taken in by the rates. Read carefully before you accept. DailyIndia.com reports:

The best low interest rate credit card will charge a low rate of interest and have low annual fees; several purported low interest rate credit cards have an annual fee as high as $ 60. This can offset any savings that may accrue from the low rate of interest.

Read more: Which low interest credit card is right for me?

Easy steps to improve credit

Your credit history isn’t so very good and you need some help cleaning up your record? Well, here are a few tips from a couple of experts on how to better your record and repair your credit score. Localsource.com reports:

As a rule of thumb, financial experts say that non-mortgage debt payments should not exceed 10 to 15 percent of your take-home pay each month. Too much current debt will make lenders thing twice about extending you new credit.

Read more: These Easy Steps Can Help Improve Your Credit

Control credit card use

Think of debt as a disease for which credit cards are the most common cause of contacting it. Have you ever heard of anyone who made their fortune by borrowing money for personal expenses?

Reconsider the purchases you’ve been making with your credit card by thinking of them in terms of cash purchases. Anything you can repay in 25 days should be avoided.

The only purposes when it’s acceptable to use credit cards are for safety and convenience.

Online purchases in particular should not be made with debit cards as it gives thieves and errors the opportunity to empty your checking account directly.

Having no balance on your card can be advantageous as you can get a card that doesn’t charge an annual fee and offers a grace period before the interest rate is activated.

If you are in the habit of carrying a balance, you should get yourself a card with low interest rate. The annual fee is of little consequence.

At most carry no more than two or three credit cards at any time. Not only are they unnecessary but losing or being robbed of them would mean paying $50 per card. Credit card info.com reports:

Debt is a disease and credit cards are one of the easiest ways to get sick. Nobody ever got wealthy borrowing money for gifts, clothes, restaurants, entertainment, or travel.

Americans are drowning in credit card debt

Most Americans would like to think that this great nation is a great example of a diverse nation. But there is one thread that unites all Americans across great divides: we just love to spend money. Americans have increasingly been spending more than what they earn. And the trend is worrisome to say the least. According to a poll conducted by ACNielsen, Americans, along with the Portuguese, are the world’s worst savers!

And there are more statistics to increase the worry lines on your forehead. According to the Federal Reserve, U.S. consumer debt stood at $2.16 trillion as of October 2005. Enidnews.com reports:

"We see clients with $60,000 in credit card debt, " said Jennifer Delcamp, CCCS vice president and a former counselor. "That’s not uncommon. We don’t say credit cards are bad, we try to teach people to use them responsibly. "

Read more: Credit cards, medical bills are a key source of financial woes

Transferring your credit card balance? Beware of transfer fees

If you’ve been using credit cards, and have a debt that is big enough to cause you some pain, then you are a prime candidate for this game. Here you are given tantalizing offers of transferring your credit card balance to a new card at zero percent interest for six months. Sounds just too good to be true, right? And yet, you cannot resist the temptation. After all, this way, you can transfer all your debt to the new freebie card and avoid paying interest for some more time.

But if CardRatings.com, a consumer-oriented Web site, is to be believed, you’re better off staying miles away from such offers. Card issuers attach a fee called a transfer fee every time you move your credit around. These fees are a percentage of the amount transferred and the catch here is that no cap is spelled out for the transfer fee in the card agreement. So, essentially if you plan to put $10,000 on your new card, an uncapped 4 percent fee would put you down by $400!

High credit card debts? Use these tips

According to a report released by the American Bankers Association, most Americans are behind on credit card payments. This may not come as news to you, but the fact that the increasingly deplorable debt situation of most Americans is worrisome. According to the report, the months from July through September 2005 saw the number of credit card accounts 30 days past due — or more, reaching its highest levels ever.

Agreed that the times are bad, there is a recession on, and natural disasters have taken their toll and well, things are not as good as they used to be. But instead of wallowing in self-pity, we can do a few things to better our credit standing. One of the most important things to do is take control of our credit card debts. They are the most debilitating and difficult-to-pay-off-debts. But there are things you can do to avoid or wipe out credit card debt. Michigansthumb.com reports:

Investigate consolidating debt onto one card. This may be more advantageous to you in your effort to wipe out debt.

Read more: Tips for avoiding, exiting credit debt

Old-fashioned is in: Save and spend

Most of us have suffered from this unnerving urge to buy something knowing well enough that we don’t have the means to pay for that expensive item. We bill it to our credit cards and hope the enjoyment of the object will help us forget its price. Of course, we may well be able to forget, but your card company does not, and very soon you will be saddled with a debt so huge, you wouldn’t know how to begin repaying.

One of the most difficult questions to answer is how to keep your credit card debt under control. But when you think of it, it is not such a difficult task. All you need is to treat your credit card as a plastic check. Try this little trick that some people have used successfully.

Every time you use your card, enter this transaction into your checkbook. Also, don’t forget to debit your checking account for that sum. Then ensure that you pay the total every month. Another important thing: Only spend how much you have in your bank. Don’t overspend and keep a check on your balance sheet. Try to avoid going into the red and the minute you feel that your balances are diminishing, exercise some self-restraint and control your expenditure.

Another thing you could do is to make major purchases in cash or using your debit card. This way, you will control your purchases, and slowly but surely, your urge to overspend will also be curtailed. This may seem difficult initially, but if you stick to it, you will find your bank account growing stronger again. Agreed, it may seem old-fashioned but if you do it this way, then you can rest assured that you will not overspend or be saddled with a debt that you cannot repay.

Credit cards: Pay up fast or regret

Agreed it is not easy for most of us to keep pace with our credit card payments. But what you don’t realize is that credit card companies have many tricks up their sleeves that they use one by one to ensure that you not only pay up but also pay much more than what you originally have to. Mailtribune.com reports:

Says Matt Conens of Consumer Credit Counseling of Southern Oregon, "It’s not easy being a savvy consumer, but knowing what you are up against can keep you from paying more than you have to, and help maintain a high credit score".

Read more: Late for an important date: credit card payments

Helpful Hints on Using Credit Cards

There are two sides to credit cards. They can be a boon for emergencies, and being able to pay the balance off every month makes for an advantageous privilege. However the very same credit cards can be a downright hellish experience if you don’t control how you use them.

Think twice before carrying balances as cards charge as much as 20% and more in interest in the name of finance charges.

Examine your statements very carefully and in case of any doubts get them clarified with the company right away.

Cash advances generally incur a huge finance charge with interest being charged from the moment the money is withdrawn instead of after the next statement closing.

Be careful about annual fees that many cards charge over $50 merely for the privilege of using the card.

Credit card offers in the mail promising low rates may have an expiry date after three to six months. So make sure you know from when and how much you’ll be charged on expiry of the introductory offer.

Avoid impulse purchases that you are not able to afford without the card.

If you fall behind in payments, it’s time to reduce recreational expenses. You could speak to the company for a repayment schedule that is convenient. Prepare a budget and stick to it. You may also consider credit counseling services to overcome debt. Credit card info.com reports:

Credit cards can be helpful in emergencies or if you are able to pay off the balance each month, but be wary! Credit cards can also get you into trouble. Here are some helpful hints on using credit cards:

How Credit Cards are Billed

Credit cards differ from conventional loans in repayment as the amount can’t be spread over a fixed period. Minimum monthly payments are required as specified in the terms.

The amount for minimum payment is mostly 2 percent of the outstanding balance. However paying only minimum amount each month will increase your debt. Late fees and higher interest rates on cash advances are also possible.

Students have to make their own decision on whether they are ready for the responsibility of a credit card. Getting one is much easier than managing it and you can easily end up running a huge balance that is attracting interest but without payments being made. A study found that from 79 percent of students with multiple reasons for using credit cards, just 13 percent were able to restrict card usage to emergencies alone.

Your need for a credit card should be preceded by asking yourself certain questions. Do you really need a credit card and can you afford one? Will you be able to repay the balance every month?

Having made the decision to get a credit card, the smart advice is to shop around. The factors that you need to consider include low interest and finance charges or the APR, low or no annual fees, a grace period prior to finance charges being levied and additional benefits like purchase warranties, free gas, airline miles, etc. Credit card info.com reports:

Unlike repayment on a traditional loan, such as a student or car loan, credit cards do not allow you to spread the amount you owe over a fixed period of time. Instead, you are required to make a minimum monthly payment, which is the smallest amount you can pay and still meet your cardholder agreement (the terms you agree to when signing up for the card).

Errors and disputes

When you open a credit card account, the issuer must notify you about the rules for correcting billing errors. The issuer needs to act promptly on these rules if errors occur.

Mistakes on your bills can be disputed. During the investigation period, the payment of the amount is withheld. The error may be a charge for the wrong account, anything you refused or failed delivery. The rest of the bill not in dispute including finance and other charges however, need to be paid.

To dispute a charge, write to the creditor with all your details mentioned. Don’t delay as the creditor must be informed within 60 days of the bill with the error having reached you.

If your complaint is not rectified, the creditor has to acknowledge it in writing within 30 days. The dispute has to be sorted within a maximum of two billing cycles but not beyond 90 days.

If your card has been used without your knowledge you are responsible for only up to $50. But if you are able to report loss of the card before the card is used, you cannot be held responsible for any of the charges. Credit card info.com reports:

Errors on Your Bill. Issuers must follow rules for promptly correcting billing errors. You'll get a statement outlining these rules when you open an account and at least once a year. In fact, many issuers include a summary of these rights on your bills.

Credit card considerations

Different credit cards offer different terms so you need to consider how you plan on using your card. If you intend to pay in full each month, annual fee and other charges are key considerations if there is a grace period for purchases. For cash advances, grace periods are mostly not valid even if they are for purchases. For taking your time to pay for purchases, the APR and balance computation method are major factors.

The credit limit could also be a consideration as may wide acceptance of the card and the services and features offered by the plan. There are affinity cards which are all-purpose and sponsored by professional organizations, college alumni associations and travel companies. Usually a portion of the annual fees or charges is donated to the sponsor or you may be entitled to free travel and other bonuses.

Find out if there are special delinquency rates. Cards with low rates for timely payments may charge a huge APR for a number of delays in a specific period. The rates could be almost 20 percent.

According to federal law issuers cannot send you cards you never asked for. But renewal or substitutes cards may be sent without request. They may also send you applications and solicitations or ask you over the phone.

The day your payment reaches the issuer, it must be credited to your account. This doesn’t apply only if it has not been done according to the prescribed procedure or if the delay in crediting will not incur a charge.

On making any return or paying more than the balance, you can keep the credit on your account or request a refund. Refunds have to be issued within seven days of receiving your request. A credit remaining in your account for over six months should be refunded by the issuer. Credit card info.com reports:

Credit terms vary among issuers. When shopping for a card, think about how you plan to use it. If you expect to pay your bills in full each month, the annual fee and other charges may be more important than the periodic rate and the APR, if there is a grace period for purchases. However, if you use the cash advance feature, many cards do not permit a grace period for the amounts due - even if they have a grace period for purchases. So, it may still be wise to consider the APR and balance computation method. Also, if you plan to pay for purchases over time, the APR and the balance computation method are definitely major considerations.

Balance Computation Method for the Finance Charge

Some credit cards try to lure you with offers of a free period. A free period also known as a grace period exempts you from having to pay the finance charges of the credit card by paying the complete balance before the expiry date.

Without a free period or if you intend to pay for purchases over an extended period, you need to know the issuer calculates the finance charge. One way of doing this is the average daily balance. The most common method, it credits your account from the date of the payment receipt by the issuer. The beginning balance for each day of the billing period minus any credits made to your account the same day is totaled for the balance due. The plan determines whether or not new purchases are added to the balance, which typically includes cash advances. The daily balances are then added to the billing cycle and the total divided by the number of days.

Another method is the adjusted balance which is most beneficial for card holders. The balance is worked out by deducting payments and credits received during the period from the previous period’s balance. Purchases are normally not included. Here, you have to pay a part of the balance to avoid interest charges. Sometimes unpaid finance charges from the previous balance are excluded.

Then there is previous balance which is the amount owed in the previous period but usually excluding payments, credits and purchases of the current period.

Two-cycle balance takes into account the previous two month’s activities. Find out if your issuer uses this method and which specific one. Clarify all doubts with your issuer. Your billing statements also must carry an explanation. Credit card info.com reports:

Free Period. Also called a "grace period," a free period lets you avoid finance charges by paying your balance in full before the due date. Knowing whether a card gives you a free period is especially important if you plan to pay your account in full each month. Without a free period, the card issuer may impose a finance charge from the date you use your card or from the date each transaction is posted to your account. If your card includes a free period, the issuer must mail your bill at least 14 days before the due date so you'll have enough time to pay.

Choosing and Using Credit Cards

More likely than not, you would have been the recipient of a fair share of the credit card offers that pour into mailboxes everywhere, offering everything from low introductory rates to extra perks. Most will try to convince you to hurry and act before the offer expiry. But don’t accept any unless you are clear about the facts.

Credit cards are merely a means of borrowing for extra charges. The terms and conditions of each card has an impact on the overall cost. Therefore compare the terms and feeds of different cards by all means before deciding on one. Certain terms are of great importance which you need to be aware of.

The Annual Percentage Rate or APR is the yearly cost of the credit service. You need to know this before making a commitment. Another important factor that the issuer needs to inform you about is the periodic rate that is applied to your outstanding balance to determine the finance charge for every billing period.

There may be credit card plans where the issuer can change your APR due to changes in interest charges and indexes. As the rate charge is affected by the index performance, the plans can also be termed variable rate programs. Credit card info.com reports:

Chances are you've gotten your share of "pre-approved" credit card offers in the mail, some with low introductory rates and other perks. Many of these solicitations urge you to accept "before the offer expires." Before you accept, shop around to get the best deal.

Tips to avoid credit card debt

According to the American Bankers Association, most Americans fall behind on their credit card bills. And the Association has the statistics to prove its point. The report released by the Association recently states that in the period between July and September 2005, the percentage of credit card accounts that were 30 days past due or more, was at an all time high.

Of course, that is not to say that Americans as a people are not capable of managing their affairs. It is also important to note that the past few years have been quite bad for most of the people. Terrorist attacks followed by natural disasters and a general slowdown in the economy have taken their toll. People are finding it difficult to earn a decent salary and savings are down to almost nil. But that does not mean we can wring our hands and worry about not being able to do anything to avoid a credit card debt. Michigansthumb.com reports:

The Federal Trade Commission offers the following credit card tips: Protect your cards and account numbers to prevent unauthorized use. Draw a line through blank spaces on charge slips so the amount can't be changed. Tear up carbons.

Read more: Tips for avoiding, exiting credit debt

Beware of Visa-Mastercard telephone scams

There is a new credit card scheme doing the rounds nowadays. Called the ‘Visa-Mastercard telephone scam’ it involves people calling on your home or mobile number and claiming to be ‘investigators’ with your credit card company. Wrgb.com reports:

The scammer then asks for the security numbers located on the back of the card.

Read more: Avoid credit card scams

Finance tips for businessmen

Credit cards are double-edged swords. While they can be extremely useful, especially for small-business owners, paying with plastic can land you in trouble as well. Stargazettenews.com reports:

Entrepreneurs often underestimate the costs of starting a business and then later have to cover unanticipated shortfalls with high-interest credit card debt.

Read more: Family Finance

Credit card safety

When feeling stressed or depressed, it is the easiest thing to get into a buying frenzy to get your mind off your problems. Instead stick to window shopping or simply browse around. But make sure you aren’t carrying a credit card or even cash during times of depression. In fact as far as possible it would be wise to avoid carrying a credit card at any time at all.

The only thing worse than charging to a card is to pay for charges you never availed. Keep receipts safely and always verify the charges on the credit card invoices to ensure that you are not paying for any erroneous charges.

Keep your cards safe by ensuring you immediately sign on each one and having your picture on them. Never give out the card number over the phone. When making transactions, see to it that manual carbons are shredded by the sales staff.

When signing receipts, draw a line through any empty spaces above the total amount.

A change of address means you should notify the credit card companies even if you have no balance on them. In case opf loss or theft, waste no time in informing the concerned company. Credit card info.com reports:

In Banking and Credit I said that this article would be "BOMBS AWAY". I'll try to be nice, but you may want to get a little emotion going with Credit Cards--- They're Just Like Drugs.

Credit card tips for students

If you don’t already have a credit card before you join campus, you’ll have plenty of opportunity to get one once you do. Credit card companies are increasingly targeting college students to sign up for credit cards. It is common for the companies to offer free incentives like coffee mugs, Frisbees, T-shirts etc merely to fill out applications. But before signing up, give it a great deal of thought.

The fact is, a majority of on-campus credit card offers don’t offer too good a deal for students. A US Public Interest Research Group study found students with on-campus credit cards to have more unpaid balances than those without. High balances are the surest method of falling into the debt trap.

Despite the lack of a regular income and being saddled with student loans, students are considered a good credit risk. According to research students are valuable as customers due to loyalty to their first card and continually making purchases in the future.

The advantage of having a credit card is the ability to build up a good credit history. This proves to be beneficial for availing student loans, car purchasdes, apartment rental, employment and house loan.

Other advantages include security for emergencies, eliminating the need for carrying money and increased responsibility and independence. But for all these advantages, it will be enough to have just one national card like Visa or MasterCard. Credit card info.com reports:

You may already have a credit card, but if you don't, you can be sure there will be many opportunities to get one once you arrive on campus. Many credit companies set up tables in the common areas of college campuses to encourage students to sign up for credit cards. Often, they give away trinkets such as T-shirts, water bottles, frisbees, coffee mugs, etc. in exchange for having you fill out an application. Sound easy? It is, but think twice before you do it.

Hazards of choosing balance transfer

Advertisements for balance transfers can be highly confusing and one may end up finding it difficult to compare credit cards in order to determine the one that may be best suited for your individual requirements.

There are a number of factors to take into consideration before making a decision on balance transfer on credit cards.

0% purchases small print: Many cards offer a 0% balance transfer rate along with a 0% rate for purchases. Without a 0% offer rate for purchases, the implication is that any new purchases that you make on your card will be charging interest rate at the regular rate. Remember that the payments you make every month to your credit card will not cover the new purchases till the time the balance transfer has been paid completely.

Minimum monthly spend: Beware of a minimum monthly spend clause that some credit card issuers have. The card may offer 0% for the entire duration of the transferred balance but only on the condition of meeting the minimum monthly spend requirement. Failure to meet this minimum monthly spend would imply that all charges will be at the regular APR rate. Credit card info.com reports:

Adverts for balance transfers can be confusing and consequently it is difficult to compare all credit cards and find the best one for you. The uSwitch.com credit card comparison service makes this easy.

Guide to Balance Transfers

When high credit card fees prove exhausting, one may want to consider the option of lowering interest charges by transferring the balance to another card. Balance transfer is both smart and easy as an option for reducing credit card costs. Ensure that you fully understand the terms and conditions of the new card to maximize savings.

Balance transfers can have numerous advantages. One can drastically reduce interest rate and fees. Credit card companies charge different interest rates for balance transfers with the most common one being 0 percent for six months through 12 months. Some cards may link the introductory APR or annual percentage rate to billing cycles.

There can be other benefits also like the ability to get a new card without any annual fee, a longer payment grace period and cash back on purchases. Sometimes car rental insurance, identity theft protection and money saving discounts are also offered.

Balance transfer can be done by filling out the paperwork issued by a new card. You can also contact the credit card company that you wish to transfer your balance. Another way of doing it is through balance transfer or convenience checks. These can be sent to the company from which your want to transfer the balance. Credit card info.com reports:

Are you tired of fighting high credit card fees? Why not lower your interest payments by transferring your balance to another card. Balance transfers are one the smartest and easiest ways to reduce credit card costs. Just be sure you understand the terms and conditions of the new card, so you can maximize your savings.

Credit Card Security: Where Are We Now?

Even though protection from credit card fraud may leave much to be desired, there’s no denying that the companies issuing the cards are making commendable efforts in combating the menace.

Visa USA has come up with Advanced Authorization, a patent-pending technology geared to eliminate fraud even before it occurs, at the time of checkout. It zeroes in on coordinated attacks on multiple accounts in real time.

Each time a card is used, an instant rating of the opportunity for fraud is made to the issuer. An immediate response is sent back to the place of transaction to decline or accept.

Another Visa initiative, Visa Advanced ID Solutions issues customized versions of ID Analytics ID Score to members. The score establishes the identity of applicants enabling financial institutions to prevent fraudulent debit and credit card applications.

On the otherr hand, Discover Financial Services continuously monitors ongoing fraud trends to get to the root of the problem. Any sign of data compromise whether with a merchant, processor or value-added reseller is sought. Credit card info.com reports:

At the end of the day, are credit card companies doing enough to protect consumers, merchants and banks from fraud? The results will have to speak for themselves, but companies like CyberSource are keeping tabs on Internet-based credit card fraud and, according to the results of its 2006 Fraud Survey, there is more work to be done.

Avoid credit card rate hikes

In a study by Consumer Action, a consumer advocacy group, credit card companies were found to be hiking interest rates for all consumers including those paying on time. Those facing financial problems as well as those not doing so, are charged higher interest rates on credit cards, thanks to the universal default policy.

The implication of the universal default clause is that the issuer has the right to raise your interest rate in case of late payments or accumulating excessive debt. The logic behind this is the likelihood of the customer being a greater risk to the bank.

Some of the reasons for the default rate being applicable to your case include worsening of credit score, late payments on mortgage and car loans, exceeding credit limit, bounced checks, excessive debt, excessive available credit, new credit card and inquiries about car loans or mortgages. Even disputes of medical bill payments can be basis for universal default. Universal default translates into a drastic increase in your overall debt.

Apart from universal default, banks also charge higher annual fees, cash advance fees, bounced check fees, overdraft fees and shorter due dates. Credit card info.com reports:

Understand the universal default interest rate and how it can hit your wallet. NEW YORK (CNNMoney.com) - Credit card issuers are upping the interest rate you pay on your debt even if you pay your bills on time, according to a study from Consumer Action, a consumer advocacy group.

Credit card balance transfers

A credit card balance transfer is the means by which the balance of an existing credit card is moved to a new credit card. The purpose is to save money with the interest-free period that credit card companies offer to new customers.

With increasing competition in the credit card industry, credit card companies are extending their interest-free periods for balance transfers. The opportunities are tremendous which is wh6y it’s important that you shop around to find the best deal for a balance transfer option for maximum savings.

To avail of balance transfer one simply has to apply for a new credit card and once the application is approved, the existing balance on an old credit card can be transferred to the new card by speaking to the new card issuer. With most credit cards offering the convenience of an online system, the balance transfer can be done on your own.

An important reminder about balance transfers is that you may only get a reduced APR if you transfer your balance immediately after applying for the new card. Credit card info.com reports:

If you're considering a balance transfer deal, but aren't sure how to find the most suitable offer, read on. The following balance transfer article outlines exactly what a balance transfer is, how they work, what deals are available, and points to consider when transferring your balance.

All about balance transfer

Under the burden of soaring credit card debt, it may be a wise move to start a new credit card, strange as it may sound. The reason behind it, is credit card balance transfer usually available to all with a mailbox and social security number.

Credit card companies try to rope in new consumers by luring them with free balance transfer from an old credit card. A grace period is fixed with significantly reduced charges for the transfer. The typical duration of the period is six months to a year following the transfer.

For the smart consumer this is a great opportunity to be free to pay down a credit card balance minus the interest charges. First he opens a new account for balance transfer on expiry of the old one. Then again, he transfers all the balance to a new card with a new grace period and low charges, if any. However without closing old accounts, it is not advisable to operate more than two credit card accounts as credit scores can be adversely affected. Credit card info.com reports:

Opening a new credit card may seem like the last smart thing to do when faced with mounting credit card debt. In one case, however, this may make sense and wind up saving you a lot of money as well. This special exception is a credit card balance transfer, and is oftentimes available to anyone with a mailbox and social security number.

What is a balance transfer?

When you transfer your balances from your current credit cards, whether in part or whole, into a single credit card account, the process is known as balance transfer. It makes sense when a card holder consolidates all his high-interest credit card loans into a new card offering a low rate of interest. The card holder then has to pay only one monthly payment to the new card.

The facility of balance transfer is mostly offered for a fixed period during which you are able to pay off all your balances. Some cards may offer this service for as long as one takes to pay off the balance but it isn’t very common. On expiry of the fixed period regular APR becomes applicable. The details of the APR can be found in the terms and conditions of the card.

A majority of cards charge a fee for the facility of balance transfers, unless it is a promotional offer with no charges. Usually the fee is about 3% of the amount being transferred. However the fee is insignificant when compared to the interest savings resulting from the balance transfer. Credit card info.com reports:

Balance Transfer is a process of transferring all or part of the balances from existing card(s) to a single credit card account. This lets a cardholder consolidate all his/her existing high-interest credit card loans into one card that offers a Low Fixed Rate, and then make one monthly payment to a single issuer. The most common (and attractive) Intro Rate is 0% APR.

Credit Card Balance Transfers

The balance transfer feature in credit cards is the option of transferring debts from one credit card to another. It is mainly beneficial when the new credit card comes with interest rates much lower than the older one.

The popularity of this service is increasing as more and more customers dicover the convenience of overcoming debts. With attractive balance transfer options rival credit card companies can successfully lure customers away from other credit card companies.

A growing number of credit cards offer an introductory balance transfer fee at 0%. In this case it is clearly an advantage to transfer balances from older cards. Customers should be aware of the balance transfer limits that their new cards due to which only a part of the existing balance can be transferred.

The other advantage of balance transfer is that the customer no longer has to keep a track of multiple balances to be paid as only one credit card payment nees to be made every month. This helps in better budgeting in order to overcome credit card debt. By transferring balances from all high interest credit cards, customers are able to make significant savings. Credit card info.com reports:

Credit card balance transfer is an important feature for many credit card users. It allows them to transfer their debts from one credit card to another. This is significant if their new card has a lower interest rate than their previous one.

What is a Cash Advance?

A cash advance is one of the features offered by credit card services whereby the card holder is able to withdraw money from their current balance. Usually the amount that can be borrowed in the form of cash as cash advance is a certain percentage of the credit limit on the card. In every billing statement both the existing credit limit and the cash advance limit is stated.

The means of utilizing the cash advance facility is very convenient as one has to go no further than the neighborhood ATM to withdraw the cash advance amount desired. A card holder is entitled to withdraw cash advance upto the limit specified as cash limit. In case this limit is exceeded, the ATM may still dispense the cash but electronically flag the transaction. Cash advance in excess of the specified limit is usually treated as exceeding the credit limit in purchases with extra charges.

Cash advance in credit cards is an extremely expensive option of obtaining cash. It is therefore advisable to seek other alternatives first and when all the others are exhausted, only then should the cash advance option be resorted to. Credit card info.com reports:

In the world of credit cards, a cash advance is an option cardholders can use to borrow actual currency against their current balances. For most credit card users, the amount of cash available for a cash advance is a small percentage of their overall credit limit. Statements issued by the bank will generally provide two sets of numbers: the credit limit and the cash advance limit.

Correcting credit card errors

Keeping errors on your credit card billing statements to a minimum requires you to go through your statements meticulously. Thanks to the Fair Credit Billing Act you enjoy protection against billing errors, unauthorized use of your account, any charges levied on purchases that never reached you and doubtful charges for which you can ask for proof of purchase.

Once you notice an error on your statement, write to the company within 60 days of having received the statement. Mention your name, account number, the date and amount of the transaction being disputed and your reasons for it. The letter should be sent to the address mentioned on the bill and not along with your payment.

The credit card company has to then give you an acknowledgement of your letter within 30 days of receiving it and is obliged to look into it within 90 days. During the dispute period, you are not required to pay the amount being disputed.

Should the error be confirmed and it is determined that you are not to be charged for the disputed amount, the company has to carry out the necessary changes in your account. If however, the charged is found to be legitimate, you have to receive in writing the amount you have to pay and the reasons why. You will also have to bear additional finance charges if any.

For more information, you can get in touch with several non-profit and non-commercial organizations that have been specially set up for the purpose. Credit card info.com reports:

One way to avoid billing errors and unjustified fees is to carefully go through your monthly credit-card statement, making sure all the transactions are legitimate and that other charges -- finance charges, late or over-the-limit charges -- are justified.

Balance Transfer

The facility of balance transfer that credit cards offer may sound like a good deal but there are certain clarifications you should seek. Ask about how long the introductory rate lasts. Find out the annual percentage rate on expiry of the teaser rate and whether the teaser rate is valid for transferred balances, new purchases or both. Ask about the annual fee, late fees and overlimit fees. Sometimes there may even be balance transfer fees

Some cards may offer waiver fees for initial balance transfers only, which refers to the transfers that you specify at the time of signing up for the card. The rest of the balance transfers is charged at the rate of cash advance fees.

Remember that getting an offer does not necessarily mean qualifying for the super low rate. Some cards withdraw the low rate facility in case of even a single default, following which the rates could shoot up to as much as 11 percent. Falling behind on payments on another card could result in the new card raising the rates.

It may be advisable to continue with the minmum payment on your old card before the balance transfer is activated as it could take upto four weeks. You will be notified when the balance transfer is complete. Even then, check with the old card company to confirm. It may be better to wait until you receive a billing statement from the previous company that shows zero balance. Request for it if they don't send it to you. Credit card info.com reports:

How do I transfer a balance?

Before you transfer that hefty credit card balance to a card with a super-low introductory rate, read the fine print and ask questions. Otherwise, you could end up paying fees and a much higher interest rate than you expected.

Credit card fraud

It is estimated that each year credit card fraud runs into hundreds of millions of dollars. Sometimes, there's nothing you can do to prevent credit card fraud from affecting you. Fortunately in most cases, there are certain steps and precautions you can take to save yourself from falling victim to credit card fraud.

As soon as your credit card is delivered, sign on it right away. Avoid carrying credit cards in your wallet and keep them instead in a business card holder or a separate pouch. During a transaction never let the card out of your sight and for longer than is absolutely necessary. If you notice any inconsistencies in your billing statements, waste no time in getting them clarified from the credit card company. Be sure to notify the companies in case of change of address, preferably in advance.

Never leave your cards lying around nor lend it to anybody for any purpose. Similarly don't let anyone have access to your PIN numbers. It is best if you can memorize them, otherwise avoid carrying the pin numbers in the same place as the cards. The only time you should disclose your card number on the phone is when you're speaking to the credit card company.

Loss or misplacement of credit cards should be reported to the company with minimum delay possible. According to the law, it is only after you report a stolen or lost card that you won't be held responsible for any transactions made on the card. Credit card info.com reports:

A thief goes through trash to find discarded receipts or carbons, and then uses your account numbers illegally.

A dishonest clerk makes an extra imprint from your credit or charge card and uses it to make personal charges.

You respond to a mailing asking you to call a long distance number for a free trip or bargain-priced travel package. You're told you must join a travel club first and you're asked for your account number so you can be billed. The catch! Charges you didn't make are added to your bill, and you never get your trip.

All about credit cards

Today credit cards have become a way of life for people all over the world. Credit cards are now available in countless variations to suit people from all walks of life. Like people credit cards come in all kinds of shapes, sizes and colors. They could be miniature ones that fit on key chains or they maybe personalized photo cards. Naturally the rates also differ from one card to another. Some cards carry no annual fees whatsoever while some charge huge amount in fees. Similarly there are those with fixed rates just as there are cards that offer variable rates.

Contrary to the common misconception that credit cards are more of a curse than a boon, with the right card can do wonders for your budget. For someone who travels very often, a card that offers incentives like frequent flyer miles and discounts on hotel accommodation can even be highly cost-effective. The trick is to find the card that best suits your set of needs. On the flipside, there's no denying that there are major risks involved. Signing up for a card without being familiar with all the terms and conditions involved can have severe consequences. In this case ignorance can prove very costly indeed.

You may be ready to sign up for a credit card for the very first time, you could already be a card holder wishing to find out about better offers or you could simply have a desire to learn more about getting the maximum advantage from your existing card. Whatever your needs may be, you're sure to find a card that best suits your lifestyle and offers you the best incentives. Credit card info.com reports:

Credit cards are practically a must in today's electronic society. You need one to rent a car or to make reservations at a hotel. If you shop online, credit cards are the safest way to buy. And, they are ever so convenient.

A credit card for every need

There’s no single credit card that can be considered the best for just about anybody, mainly due to the fact that different cards suit different people according to their professions, ages, status and other demographics. Therefore before applying for any credit card, it is advisable that you do some introspection on your finances and needs.

If you’ve had a credit card in the past and less than fond memories of the experience, there is no need to shun all credit cards for the rest of your life. Yet nor is it a must that you must take another credit card.

In reality credit card companies today have come up with offers designed especially to suit those with bad credit. Just as they have tailor-made schemes for frequent-flyers, movie buffs and so on and so forth. Incentives offered by different credit cards to lure new customers include 0% interest rates, free frequent flyer miles, etc.

There’s a staggering variety of credit cards available for whatever kind of benefit you want. Some have 0% APR, no fees at all, student credit cards, to name a few. Depending on the kind of benefit you seek, you are likely to find a credit card for you. Credit card info.com reports:

The best credit cards are different for each individual. That's why before you apply for a credit card online, you really need to look at your financial situation and asses your needs. We have come to the conclusion that anyone can benefit from a credit card, so long as you choose one that offers the right things for you.

Origin of credit cards

The earliest known credit card use has been documented by Encyclopedia Britannica from the United States back in the 1920s. It was believed to be the hotel chains and oil companies who started the practice of issuing cards to customers in lieu of purchases made at their outlets. Post-World War II the practice increased at a significant rate.

Diners Club Inc is credited with the introduction of the first universal credit card which could be used at various different places of business in 1950. There was an annual fee which was billed on monthly or yearly basis. In 1958, American Express came up with their own card which was made famous with their slogan "Don’t leave home without it".

Gradually a bank credit card system followed where the account of the merchant was credited on the basis of sales slips. The charges were later billed to cardholders at the end of the billing period. The bank was paid by the card holders for the entire balance or in the form of monthly installments at a fixed rate of interest which was also referred to as carrying charges.

In 1959 BankAmericard started as the first national bank plan from the Bank of America in California on a statewide basis. Today it goes by the name of Visa. MasterCard which went by its initial name of Master Charge and other bank cards were quick to follow. Credit card info.com reports:

Let's start at the beginning. A credit card is a thin plastic card, usually 3-1/8 inches by 2-1/8 inches in size, that contains identification information such as a signature or picture, and authorizes the person named on it to charge purchases or services to his account -- charges for which he will be billed periodically. Today, the information on the card is read by automated teller machines (ATMs), store readers and bank and Internet computers.

A nation of big spenders

A survey by AC Nielsen recently put the United States at the top of the list of countries with the most consumers surving from one paycheck to another. 28% had no spare cash after making payments for living expenses.

In contrast nations like Philippines, India, Malaysia, Indonesia and Thailand had the highest rates for savings while at the same time, raking at the bottom of the list of having no spare cash.

As the richest country in the world, the United States ranks first for the highest gross domestic products ahead of 192 countries in the world. In terms of per capita, the United States is third on the list with Philippines at 107, India at 125, Mexico, 66, Indonesia 121 and Thailand 72.

Therefore being the richest country, Americans are not faced with a dearth of income opportunities. Yet most spend far too much to enjoy financial security. Credit card info.com reports:

You've heard Aesop's fable -- the one about the ant and the grasshopper.

It goes something like this: The ant spends his time industriously storing food supplies for use in the future while the grasshopper lounges around on a leaf, poking fun at the ant. The grasshopper's motto is live for today, while the ant's creed is be ready for tomorrow.

Is Paying By Credit Cards Online Safe?

Online shopping has come as a relief for many who want to avoid going out to malls or shops for shopping. They can simply log on to the specific sites and can buy things at a click of their mouse. And they get their stuff door delivered. But the question to worry about is; how safe is it to use credit cards online? Well, with todays secure technology it is pretty safe to use credit cards online. The thumb rule is to see an icon at the left hand corner of the screen when you enter credit card information. This particular icon signifies that you are on a secure site. For those of you who are still not convinced with it can open a Paypal account. By doing this you enter your credit card information once only and you get a Paypal account number. Now while purchasing you have to enter your Paypal account number and not the credit card information. Credit-cards-info.com Reports:

You can rest assured that great strides have been made to ensure an online shopper’s security to that it is safer than ever to pay with a credit card for your purchases.

Read More: How safe it is to pay with credit card

Secured Vs Unsecured Credit Cards

Secured credit cards are meant for those who are looking for building their credit history or looking to rebuild their credit history. Due to periodic reporting to the credit bureau, secured cards can help in reestablishing a creditor’s confidence in a borrower. You can get secured credit cards with no fees. Unlike your secured cards, unsecured cards do not require a security deposit amount to be put down on the card upfront. Unsecured cards are famous because of the flexibility and freedom they offer. Getting an unsecured card is an indication that you have a good credit history and a very good credit rating. Credit-cards-info.com Reports:

The difference between secured and unsecured credit cards is really the security deposit required by one and not the other – especially now with the competitive rates and privileges that are offered by both types of card.

Read More: Differences between secured and unsecured credit cards

Precautions to be Taken When a Credit Card is Lost

Losing your wallet can be the worst thing to happen, as there are high chances of someone else using your cards and you becoming responsible for those bills. To avoid a situation like this, the first thing you need to do is to call and inform all your credit card companies. The companies will freeze your credit cards and put an alert and will also warn lenders to inform the company if some one is trying to use the card. You should inform the companies with in 24 hours from the time of losing the cards. Most credit card companies offer fraud protection, which limits the customer liability to 50 dollars. But credit companies admit that they rarely enforce the rule. Credit-cards-info.com Reports:

Once you have reported the stolen or lost credit card the card companies will cancel that old account and issue you another card. Usually this process is very fast and you they can get a replacement credit card to you within the week.

Read More: What to do when you have lost your credit card

How to Build a Good Credit History

To afford most of life’s biggest dreams like owning a house or a car, you need to have a good credit history. The reason is, most people do not have full cash for such expensive dreams and they need loan or mortgage to do so. Now the big question is how to build the credit history? Some times it is discouraging to see that creditors do not give loan to people with no credit history. As a student, taking a student credit card is a good way to start. One of the other options to build credit history is to apply for a gas or retail credit card. By doing this, you get your name on the bills and paying them regularly will help building positive credit history. For people who have good equity built up with their bank can go for small loan with savings as collateral. Start building your credit history as there is no better time than now. All this will take some time but it is a must for your future financial requirements.  Credit-cards-info.com Reports:

Unless you are assured of inheriting your fortune, chances are that at some point in your life you will need to borrow money and when that day comes you will need to have a solid credit history to make creditors feel safe about loaning you the money.

Read More: Building your credit history

Owning a Credit Card - General Requirements

Earlier, to get qualified for a card you had to have an established job, a steady income and a good credit rating. But today the eligibility criterion has been relaxed a lot; even the teenagers can own a credit card. A good credit rating is still taken in consideration for qualifying for a credit card.  Each financial institution has its own admissibility requirements; but in general all companies have the same basic requirements or criteria. Creditors always take calculated risk. They tend to see if you have a steady income, if you can meet your monthly payments, if you have assets to cover your expenses along with a good credit history. They also tend to see if you have some existing debt load and for how long. Credit-cards-info.com Reports:

Although creditors will look at your past financial history, applying to own a credit card is a lot easier than applying for other loans such as a mortgage where the eligibility criteria is much more severe and stringent. With some careful planning and good money-management habits you should not have any trouble applying for and owning credit cards.

Read More: General requirement of owning a credit card

How to Prevent Credit Card Frauds

Credit Cards have become a very important part of life. Proper usage of credit cards will help you by building good credit rating which is very much required in applying for loans etc. Of late, credit card problems are booming because of scams and credit card thefts. All the frauds, mostly involve lost or stolen cards. These frauds can be prevented by being a little cautious. Some of the ways to guard against credit card frauds are, do not carry more than two cards at a time. You should keep the credit cards tool free number always with you. Never ever leave your purse unattended at a public place. Always make sure that you have got the card back after doing the purchases. Always sign at the back of the card and do not leave the card open at obvious places. Never do the mistake of lending the card to somebody. If by chance you do not receive your new or reissued card by due date, immediately inform the credit card company. While shopping online, make sure you are using a secure website. Once you have closed the account, cut your card into smaller pieces. Credit-cards-info.com Reports:

Shred all credit card receipts and pre-approved credit card offers before throwing them away and keep your billing statements in a secure place.

Read More: Ways to prevent credit card frauds

The Credit Card Rate Trap Offer

The living standard has gone up with more and more people using the power of credit cards. It is very easy to fall in to a trap of credit card issuers with their very attractive and tempting offers. It looks so easy to avail the cash offer but you regret when you fall into huge debt because of it. It is a must for you to understand the credit card offers properly before taking it. When the offer is made, make sure you are not falling into a trap. They may lure you with no annual fees, low rate and other offers. But before taking all this, understand the full terms and conditions and make sure the company is certified. Ensure that your card is a secured card.  Creditlovers.com Reports:    

Many issuers begin credit card offers, by giving you a card with no annual fee. But the mistake any card buyer would commit is by not understanding the other charges the company might impose on the usage of the card.

Read More: Accepting The Right Credit Card Offer

How To Apply For a Student, Business and Cash Back Credit Cards

There are various special credit cards available which you can apply like, student, business and cash back credit cards online. These cards come with some extra features if compared to normal credit cards. You can apply for Student credit card online. This card caters to the need of students. You, as a student can apply for both secured and unsecured credit card. Like other credit cards, the amount of credit depends on your credit rating. Compare the various aspects like annual fees, processing fees, late fees, rate etc before finalizing on any card.  If you have small business establishments, you can avail for small business credit cards for major companies. You can fill the application online. Select the one which offers, the low interest rate and best of rewards. If your credit rating is not so good, you can get a secured business credit card. If you want more perks, rewards etc you can apply for Cash back credit card online. All the major companies provide you with such a card.  Creditlovers.com Reports:    

With cashback credit cards you can earn rewards from 1% of your purchase to up to 5% in some cases. Always check for the annual percentage rate, annual fees, etc. before submitting an application for cashback credit cards.

Read More: Applications for Student, Business, and CashBack Credit Cards

Credit Card Terms

Credit card issuing companies use various jargons which, if not understood properly can put you in confusion. The commonly used jargons are, Average Daily Balance, it is calculated by adding each day’s balance and dividing the total by total numbers of days in the billing cycle. This is multiplied by the credit cards monthly periodic rate. This method is used to calculate your payment due. The next one is APR, annual percentage rate which is the interest which includes fees and cost paid to get the loan. Balance transfer is the term commonly used. It means the act of transferring unpaid credit card debt from one issuer to another credit card issuer.  Cash advance fees, is nothing but fee charged for obtaining cash through credit card. Floor is the minimum rate on a line of credit after the introductory rate period. Grace period is the interest free time between the transaction and the billing date. Minimum payment is the minimum amount which you need to pay for the account to avoid going into default. There is a fee charged for going over the credit card limit, which is known as over the limit fee. Variable interest rate is the % you pay for using the money, the rate keeps on changing depending on the other interest rates. Creditlovers.com Reports:   

The card holder agreement is the written statement that displays the terms and conditions of the credit card account. This agreement is required by the Federal Reserve regulations. By law, the card holder agreement must include the Annual Percentage Rate (APR), annual fee if applicable, the monthly minimum payment formula, and the customers rights when disputing billing matters.

Read More: 15 Credit card terms you should know

Use your Credit Card Smartly

Be it a holiday, shopping, party or anything else, you will be using a Visa, a Master card, American Express or a Discoverer card. This is the best way to pay, as it is secure and traceable. If the card is stolen, you can cancel it. Your bank will issue a fresh card and cancel the old one. It is the best way to trace your shopping as you can make out where you have spent and on what. While doing all this, you should use your credit card wisely and smartly. You need to see your personal interest as credit card companies are looking to make money. Massachusetts has published a consumer guide, to understand and to select the best credit card. It is very important to know two cycle billing and interest backdating. Try to get the interest rate reduced as much as possible and pay with in time. Study in detail, the annual fee, grace period, interest rate, the credit line etc. before finalizing on a credit card. Study your flyers properly as the terms are subject to change. Creditlovers.com Reports:   

Credit card issuers have two-cycle billing--a means of calculating interest--which results in customers paying two months' worth of interest if they did not pay off the first month's balance in full. Two-cycle billing only occurs when consumers have changed from paying in full to carrying a balance each month.

Read More: Smart Credit Card Use

How to Get a Low Rate Credit Card?

Using a Low Rate Credit Card will save you lots of money. This is because you save by paying less interest on your balance. Your credit score needs to be very high to get a low rate credit card. You can apply for low rate credit card at anyplace where cards are issued or you can even go to a bank or can even apply online. Finding and applying for a low rate credit card is not a problem, qualifying is. It is a reward for maintaining good credit record. You can increase your credit score to a much higher level because of low rate credit cards. Creditlovers.com Reports:   

You can apply for a low rate credit card online. By going online to apply for a low rate credit card you can shop around and compare all of the different credit cards that are offered. If you go online to apply for a low rate credit card and approved the low rate credit card works the same as a credit card you get from the bank.

Read More: Low Rate Credit Cards

Will a Chase Credit Card Suit You?

Chase Credit Cards are very well recognized in the market. Chase credit card is a very big company and there are people to assist you, if you have any queries. As the name suggests, Chase Credit card is a card given by Chase Bank. It is called so after the name of the financial company issuing the same. Different types of credit cards are offered from Chase credit cards. Some of them are Chase classic, Cash builder, Platinum card for students etc. They have various reward plans for purchases you make. Being a large, well established company, it provides rewards plan, lower interest rate and other benefits which not all credit card companies can provide.  Creditlovers.com Reports: 

If you decide that a chase credit card is the right card for you make sure to make all of your payments on time. If you do this you will establish a good credit score and chase credit card will be able to offer you very low interest rates on your future cards. Having a lower interest rate on your chase credit card will save you a lot of money

Read More: Are Chase Credit Cards Right For You?

Where Do You Get a Credit Card Application?

The application remains the same, no matter which ever credit card you apply to. You need to pass on personal information while applying for a credit card. The information required is, your name, address, phone details, date of birth, your profession, your social security number etc. With all this information, the company gets a credit report and decides on whether to accept or reject your application. You can get your credit card application in many commercial establishments. There are thousands of websites from where you can download application or can apply directly. After doing this, application is sent to the company for approval. If you have applied for a card through mail, it will take a couple of weeks to inform you whether it’s accepted or rejected. If applied online, you are informed with in minutes about the acceptance or rejection. Creditlovers.com Reports: 

Online will get the new credit card to you faster then applying through the mail, but applying through the mail assures you no one is hacking in to your computer and getting your personal information. But then again people do steal mail and trash also to get personal information about you.

Read More: Credit Card Applications

Be Careful With Credit Cards

Credit Card Companies target small business owners as these companies know that such a segment is always in need of money either to strut up or for regular running. Never make the mistake of piling up debts on your card and to reach a level of not having the capacity to pay even for minimum payments each month. As per consumer Federation of America, by the year end, banks will mail 3.2 billion offers to potential card customers. Don’t feel happy, the normal invitation says that you have been pre approved for a specified amount of loan at an introductory interest rate. And this interest jumps after couple of months, leaving you in a huge debt crisis. You should take a low interest rate card with the offer of transferring old debts. The moment this rate is going up, switch to another card or you can get an offer from another card and then you can negotiate with your present card holder. Pay your card on time. Even a day’s delay in payment, can cost you a lot. Creditlovers.com Reports:

While a barrage of credit-card offers can drive you deeper into debt, says Detweiler, it can also be used as a tool to reduce card balances systematically so you can get out of debt. It's called "card surfing," and it works along these lines:

Read More: It Pays To Be Careful With Credit Cards

How to Apply for a Credit Card Online?

All you need to apply for a credit card online is internet access. Online credit card applications are very user-friendly. All you need to give is your name, address, phone and social security number. On the basis of this information, credit card companies can approve or reject your application in a short time. If approved, the credit card company will send you the credit card through mail. Online stores also offer credit cards but you may not be allowed to use it any where else. But some stores provide credit cards which can be used any where. Credit card applications are available both online and offline. Online applications are much faster and you can get the acceptance or rejection in a few minutes. But the mail service can take couple of weeks. Creditlovers.com Reports:

The cash back reward program means that with every purchase you will earn cash back toward your balance for that credit card. You may also apply for a travel reward credit card online. A travel reward credit card offers to you points to use for hotels and or flights, or may offer frequent flier miles.

Read More: Apply for a credit card online

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?

What to Look for When Shopping for a Credit Card

It is a smart move to shop around and research before going in for a credit card. Compare the different characteristics of credit cards offered prior to applying for any card. Your ideal card will need to meet your requirements across a broad range of criterion. For instance, if you plan on paying all outstanding amounts promptly each month, looking for a card without an annual fee will help you save some bucks.  By contrast if you struggle to make monthly payments, a lower interest rate is vital.

Another deciding factor is the APR or annual percentage rate. There are different types of APR and these will determine how much interest you will pay if you carry over a balance or take out a cash advance.  Reading the credit agreement closely should reveal these charges. Different credit cards also have different credit limits too. Some cards offer incentives such as rebates or cash back when you use your card or frequent flier miles or some other similar offer.  This can be vitally important for those individuals who use their credit account for business. Federalreserve.gov Reports:

Credit card companies use one of several methods to calculate the outstanding balance. The method can make a big difference in the finance charge you’ll pay.

Read More: Choosing a Credit Card

Protect Yourself From Fraud

Whether you have one credit card or many one of the most important concerns for cardholders is the ability to safeguard yourself from fraud and identity theft, both of which are increasingly common today. A recent report by Credit Counselors recommends that credit card holders not leave credit card numbers, PINs or any such crucial information in a place where anybody can access it. It also recommends that if users misplace their card or believe it stolen, it is important to report this to the concerned financial institution immediately. To prevent such a tragic occurence, it is important that you tear up ATM or transaction receipts with your credit card number on them. Also individuals should take care to sign new credit cards as soon as they them. Otherwise it becomes rather easy for a criminal to sign the card himself and then use your card. Additionally, users should cut up unwanted and expired credit cards. Credit Counselors Reports:

If you report the loss before a credit card is used, the issuer cannot hold you responsible for any subsequent unauthorized charges. If a thief uses your card before you report it missing, the most you will owe for unauthorized charges on each card is $50.

Read More: Credit Card Tips