Things To Know if you Use Credit Cards

In this dog-eat-dog world, everyone is out to make profits and get ahead in the rat race we call life. No matter how dedicated and disciplined you are in your use of credit cards, your providers are not going to rest until they figure out a way to make you pay – literally.

There are aspects to credit card usage that not many people are familiar with, aspects that hit you where it hurts the most – your wallet. Here’s what you need to know before you begin to use credit cards on a regular basis:

• Idle cards are good, because what you do not spend, you do not have to repay. But be careful about the length of time your card lies unused – some providers charge a penalty if you do not charge anything to the card within a particular period of time.
• So you think you’re clever and shrewd by paying off the full balance as opposed to the minimum every month on all your cards!

Well, your credit card company begs to differ, for how else do they go about earning money if you don’t allow them to charge interest? Simple, they hit you with a fee for not maintaining a balance on your account – go figure!

• Interest rates on any of your cards are liable to go up if you’re late in just one payment. Speaking of late payments, did you know that some credit card companies charge late fees even if you’re late by a few hours?
• Pay off your balance as quickly as you can once you transfer to a low-interest card because once the low-interest period runs out, you’re back to paying a higher rate. Balance transfers are only useful when you know you can pay off your debts and all you need is a little time on your side. You should also know that most credit card providers charge a percentage of your balance as handling fees when you transfer.
• Never withdraw money from ATMs using your credit card – you will be charged an exorbitant rate with immediate effect. It’s like borrowing money from a usurer.
• Find out if your credit cards are subject to annual fees before you apply.
• Using your credit card abroad is not such a good idea because of the higher interest rates charged – carry travelers’ checks instead.
• Replacement of lost cards and add-on cards to the same account cost extra.
• Think twice before you ask for value added services - most credit card companies charge more for allowing you access to facilities like paying your bill using your phone.

Always read the fine print that comes with your credit card application before you begin to use the card. This way, you can make sure that you’re always on top in the money-saving game.

This article is contributed by Sarah Scrafford, who regularly writes on the topic of Best business practices. She invites your questions and writing job opportunities at her personal email address: sarah.scrafford25@gmail.com.