Credit Cards Handling Tips

Credit cards could be your best friend your worst enemy depending on how you use it. Being a best friend for credit cards does not mean that you use them most of the time. A good credit card user knows when to use credit cards or simply opt to use cash. Millions of consumers nowadays are experiencing financial hardships because they were unable to control the use of credit cards.

Before you sign apply for another credit card, there are things that you need to keep in mind. By remembering these facts, you could prevent financial troubles that could come from credit card transactions.

1. Introductory Interest Rate Doesn’t Last – Introductory rates that range from 2.5% to 3.5% only last from three months to one year. After the time period for the low interest rate, your debt with credit cards will have interest rates from 16% to 28% (for cash advances).

2. Terms and Conditions Could Change – Unfortunately, part of the agreement that you have signed to obtain a credit card is that credit card issuers is allowed to make some changes in your payment terms and other conditions. Always be updated with the latest news to prevent confusion on monthly payments.

3. One Day Missed Payment is a Late Payment – Credit card companies will never hesitate to penalize their clients if they missed their payment even for just a day. It doesn’t even matter why you missed the payment. Your next credit card bill will shoot up considerably even if you still sent in your late payment.

4. Promos are Too Pricey – While using a credit card related to airlines and some shopping malls could give you rewards, cashing in those rewards from credit cards could only be achieved when you have already spent thousands of dollars. A free airline ticket could cost you thousands of miles of traveling which translates to thousands of dollars in ticket price.

5. Do not fall for the 0% scheme – If you see something on sale, an enticing price could force you to use your credit cards since they will not charge any interest rate. While this is true for the sellers, the issuer will still use the same interest rate.

6. Minimum Payment is Almost for Nothing - If you’re constantly paying for the minimum required payment, you’re basically paying for the interest rate only. Avoid paying the minimum and reduce your personal loan slowly.

7. Seek Help in Control – If you’re signing up for a credit card, avoid unlimited spending limit or choose a credit card that has a spending limit that should not be beyond your earning ability. Before you know it, your salary is only for paying those credit card debts if you use your credit card unwisely. Limitations will help you control your spending with the credit card and use them only when necessary.

8. You Could be Susceptible to Bait and Switch – Applying for a better rated credit card is a good thing. But unless you receive the credit card with the terms and conditions that they promised, do not expect of gaining a good interest rate from your lending company.

9. Cash Advances are Not Worth It – Although cash advances will help you become flexible in your spending, the advantages is often outweighed by the interest rate. The interest rate of cash advances will not be less than 25% and could be higher depending on the credit card issuer.

10. When All Else Fails, Negotiate – If you think you can’t handle the credit card debt anymore, seek assistance from your lender. Explain your current economic condition so that you’ll be able to gain new credit card loan arrangements. They will usually agree to these conditions since it’s better compared to declaring bankruptcy.

These are the things you should remember when you already have a credit card or thinking of having one. They could work for your advantage as long as you control them.