Update Your Credit Cards to Save Money and Earn Rewards
As the housing market continues its decline, and as the availability of credit gets more expensive or vanishes altogether (even for individuals who are good credit risks), there has never been a better time to check your purse or wallet and make sure that you’re getting the best deals you possibly can with the credit cards that you are carrying. If you’re like me, you have several different credit cards and you’re pretty fond of the ones you have. You don’t overuse them, you pay the bill regularly, and you keep the balance at a manageable level, if not always at zero.
What I’ve just described is responsible use of credit cards, and millions of individuals enjoy the advantages and convenience of credit cards year in and year out, smooth sailing, using the flexibility that they offer to ease financial transactions every day. Here’s the problem: this is just the type of behavior that the credit card issuing companies adore, because as you become lulled by the ease and convenience of these financial tools you also become less likely to shop and compare the deals that different credit card issuers offer, and you are less likely to discover that the deal that your credit card offers isn’t so great!
The credit card business is a very competitive one – there are hundreds if not thousands of credit card issuers all vying for your business. The result of this is that just about as many different incentives are offered to entice you to use a particular vendor’s product. Award points. Cash back. Low interest. Zero interest introductory offers. Low interest on balance transfer. Travel services. Roadside assistance services. The list goes on and on. You may be familiar with all of these services, but remember, they’re only offered because the business is so competitive. I’ll guess that it’s been a good long time since you’ve shopped those services to make sure that you’re getting the very best value that you can.
Shopping for credit cards could potentially save you a lot of money in fees and interest. You want to make sure that you find one that matches your spending and payment habits. Here are a few tips that you can use:
1) Understand the features of your credit cards. If you are able to pay your bill in full every month you do not have to worry about the interest rate offered and can instead focus on other features such as frequent flier points, cash rewards or other award points. If you’re not interested in any of these features, you should shop for a credit card that has a longer grace period – the period of time between when you purchase an item with your credit card and when interest begins to accrue.
2) Compare credit card costs and features frequently. Credit card interest rates and features fluctuate over time, and was a great deal when you signed up for your card several years ago might not be such a great deal now. When you shop you will most likely discover other credit card offers which are better suited to your individual needs than the solution you have in your purse or wallet. Check frequently, and if you find a better deal, take it. (They’ll give you incentive to do so such as zero interest balance transfer offers. These are excellent offers if you manage your account diligently.)
3) Know your rights when using credit cards. One of the beauties of credit cards is the added security they offer over cash. If your credit card is ever lost or stolen you will never have to pay more than fifty dollars of any charges made on the card. The Federal Truth in Lending Act guarantees this protection. If you are ever offered the chance to purchase “credit card insurance” – don’t bother. You don’t need it to cover anything over the initial $50 of unauthorized use.
4) If you have a problem with your credit card, file a complaint. If you ever find an error on your credit card bill, be certain to write the credit card company within 60 days of the date on the billing statement. Make sure your letter includes your name and account number, tell them that you believe that the bill contains an error, explain why, and give them the amount and date of the error. When paying your bill you don’t have to pay the entire thing, or even the entire minimum payment. You can pay all other parts of the bill but you do not have to pay the disputed amount, any minimum payments associated with it, or finance charges that apply to it. This protection is guaranteed through the federal Fair Credit Billing Act in the United States, and by similar legislation in other countries.
It’s important to understand your rights and the features available to you with credit cards, and it’s pretty easy. The major protections are backed by law, the same for all cards, and they don’t change over time. Shopping for credit cards is different though – it’s a task that you should do periodically, over and over. Once every six or twelve months spend some time reviewing the offers available online. Credit cards are easy and convenient to shop online, and you’ll save yourself a lot of money by doing it.
Filed under: Business