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Everyday Cheapskate: Credit Card Tips and Tricks

Mary Hunt on

There's no doubt that credit cards are convenient. They're compact, easy to carry and work just about anywhere. And that's the problem. What seems like no big deal on a daily basis can add up to one whopping surprise at the end of the month.

In the event you have fallen into a mind-numbing "coma" that has you swiping the plastic with abandon, today I have a few tips, tricks and secrets for how to get back on track and in control of your plastic.

STOP AND THINK

Unless you pay your credit card bill in full each month, never use a credit card to pay for anything you can eat or wear. Avoid using credit cards to buy nonessentials like an iPad or a TV. If that's what you really want, show some personal discipline and restraint. Save the money to buy it.

GET RID OF ALL CARDS BUT ONE

Hopefully, that will be the one credit card you've had the longest, as history plays an important factor in the credit scoring process. Now make it hard to use. Remove it from your wallet and keep it in an inconvenient, albeit safe, place.

 

DON'T TAKE CASH FROM YOUR CREDIT CARD ACCOUNT

The interest rate for cash advances is much higher than for purchases. The cash advance fee is ridiculous, and there is no grace period on cash advances. You start paying interest right away. Worse, you cannot begin to repay the cash advance until all of the lower-interest purchases are paid. If you carry a balance, that could be many years.

Note: Creditors must apply any credit card payment above the minimum to balances with the highest interest rate. The minimum payment, however, can be (and typically is) applied to the balance with the lowest interest rate, which will usually include balances with a promotional interest rate.

TOSS NEW OFFERS

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