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Tips for managing your credit cards
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h2>The Beginning of the Credit Card Era
In 1951, Diners Club issued the first credit card to 200
customers who could use it at 27 restaurants in New York City.
From that modest beginning, credit cards have become an
indispensable part of modern life. Consumers rely on credit
cards to help them achieve their lifestyle goals by letting them
take advantage of special bargains, spread payments out over
several months, and provide cash in emergencies. Credit cards
have become so widespread that they are often accepted as a
piece of primary identification.
Getting the most from your credit cards involves four main
steps:
Use your credit cards wisely. Protect yourself
against fraud. Review your credit history regularly.
Get the right card for your needs.
Use your credit cards wisely
Follow these simple tips to get the most from your card.
Tips:
Pay your credit card bills on time. This is the
single most important thing you can do to preserve and enhance
your credit rating. Always pay at least your minimum payment and
allow time for your payment to reach the company if you are
using the mail.
If possible, pay off your balance in full each month.
If this is not possible, then make as large a payment as you can
comfortably afford. Paying off or paying down your balance is a
sound financial move'one that will save you money on interest
charges.
If you can't pay off your balance in full, then slow down
on your credit card use for the next while. Take time to
step back and have a careful look at how much you earn and how
much you spend each month. A little budgeting can save you big
money down the road.
Check your statement carefully each month. Review
your statement carefully. Do all the charges look correct? Have
any required credits been applied? Are there any unusual or
unexpected charges? Your credit card company will correct
legitimate errors, but only if you bring them to their attention
in a timely manner before you pay your bill.
Transfer your balance to a card with a lower interest
rate. If you have two or more credit cards with outstanding
balances, consider moving the outstanding balances to the card
with the lowest interest rate. You will save money each month
and simplify your record keeping by receiving only one bill.
Negotiate for a lower rate with your credit card
company. If you have a good credit history, you are a
valuable asset to your credit card company. Call them and seek
ways to lower your interest rate. This is often possible, but
never advertised. If the interest rate you are currently paying
is very high, imply you may cancel the card and go with a
competitor unless they adjust your rate downward. It doesn't
hurt to ask, and you may be surprised at the results.
Protect yourself against fraud
While credit card fraud is a problem, here are a few simple
steps you can take to greatly reduce the risk of becoming a
victim.
Tips:
Sign new cards immediately. When you receive your new
or replacement card in the mail, sign it, in ink, right away. If
it is a replacement card, destroy the old card by cutting it
into many small pieces.
Shred old credit card receipts. You can purchase an
inexpensive paper shredder at an office supply store. All old
receipts with your credit card number and any unneeded documents
with your social insurance number or other sensitive personal
information should be shredded before disposal. This prevents
the common practice of criminals going through the trash to find
receipts and stealing your identity
Never fax your credit card number. Your credit card
number can lie for hours in the fax basket at the other end.
Anyone passing by can record your number and begin to use your
card number fraudulently. It is even possible for criminals to
intercept your credit card number while the fax is in
transmission.
Use caution when giving your credit card number out on
the phone or on the Internet. Only give out your credit card
number on telephone calls you initiate to business or
organizations you trust. Never give your number out to callers
who call unannounced, no matter how legitimate the call
sounds.
On the Internet, look for an Internet address that begins
https:\. The 's' indicates that it is a secure connection
and a small padlock symbol should appear in the bottom right
hand corner of your screen, indicating it is safe to transmit
your credit card number.
Call your credit card company instantly if you suspect
trouble. All credit card companies have 24 hour lost and
stolen help lines. If you lose your wallet or purse or have it
stolen, call without delay! Much fraud happens within the first
hour or two, before the victim realizes the cards are missing.
Your credit card company will block your cards from being used
and stop you from being responsible for any charges thieves
incur.
Take advantage of any security features your card
offers. Many newer cards have the option of including your
photograph on the card. This is excellent protection and is
highly recommended.
Review your credit history regularly
After you have obtained the best
credit card, and are using it wisely, review your credit
history on a regular basis. This helps ensure your history is
accurate and that any issues have been resolved to your
satisfaction.
North America has three national credit-reporting bureaus. Your
credit rating is held at one or more of these bureaus. When
checking on your rating, be sure to contact all three, as your
rating may be held on file at more than one bureau. The three
national credit bureaus are Equifax, Experian, and Trans Union.
Check the Yellow Pages, under Credit to find the numbers in your
area.
Get the right card
With all the choices in cards available, chances are good,very
good, you can find a better card for your needs. Today's cards
can save you money, offer better features, and even support a
cause you believe in. Here are some tips on finding the right
card and where to check that you have the best card for your
needs.
Tips:
4 Be alert for companies offering a great interest
rate for transferring your existing balance to their card.
Usually these rates are only in effect for a short time, often
six months. At the end of this time, the rate can revert to a
much higher permanent rate. Keep your eye on the Annual
Percentage Rate (APR); this is the figure that counts in the
long run.
Lower is better: read the fine print and find the
Annual Percentage Rate (APR). This is the interest rate the
companies charge you if you carry a balance. You want the lowest
rate possible; as each percentage point drop will save you money
on the months you have an outstanding balance.
Nothing can be better: Try for a credit card that
does not charge an annual fee. Many credit cards charge you a
fee each year to use their cards. While this may be offset by
other benefits the card may offer, you can find cards that do
not charge this annual fee. Why pay for the privilege of using a
credit card when you don't have to?
Explore the options: Today's cards offer a wide range
of excellent features, including frequent flier points, programs
that bank points toward a new car, and cards that support
charitable organizations. Other options worth having include car
rental insurance coverage, trip cancellation coverage, and
extended warranty coverage.
Colin McDougall is the editor of personal finance websites
offering credit
cards, student credit cardsand other personal & mortgage
loans.
About the author:
Colin McDougall is the editor of the financial review sites
http://www.loans-source.info and
http://www.only-the-best-credit-cards-online.com
Author: Colin McDougall
Royal Bank of Canada has announced the launch of the RBC Mobex, a mobile person-to-person payments service enabling the customers to send and receive money through SMS messages.