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Credit Card Guide


 

CREDIT CARD TIPS

CREDIT CARD TIPS


These Credit Card tips can help you make the most of your Credit Card. By understanding the different features available, you can find the right card for you and avoid unnecessary charges whilst keeping interest payments to a minimum.

  • Consider Offers of 0% Balance Transfer Offers carefully - 0% Balance Transfer offers can sound very inviting. However, you must consider how you use plan to use them. If you are likely to reduce your outstanding debt quickly and within the low rate period then they can be well worthwhile. However, if you are just switching to save a few dollars in interest with no real intention to reduce the credit card balance then you would be better with a low rate credit card. Many 0% balance transfer cards revert to a high interest rate when the offer period has expired. It is very important to find out what the interest charges will be when the offer expires. Chances are you would be better switching to an overall low interest rate credit card.


  • Choosing the right type of Credit Card - this is one of the most important factors when considering a Credit Card. If you the type of person who usually has an outstanding balance on your credit card, it would be worthwhile checking out the current interest rate on your credit card. Interest rates vary widely and can range from 0% up to a huge 20% p.a..


  • Try to pay more than the minimum payment - If you choose to pay only the minimum payment you will most likely never reduce your credit card debt and pay an excessive amount in interest charges.


  • Avoiding Late Payments - If you've ever missed a payment on your credit card, you'll know that the fee for a late payment can be quite heavy. If you are regularly missing your payment by the due date, it may be worthwhile setting up an automatic direct debit to pay your credit card by the due date to avoid any late payment fees.


  • Stay Away from Cash Advances - you'll find that interest free days rarely apply to cash advances, therefore the interest will start accruing immediately. The interest rate for cash advances is usually much higher than the interest rate for purchases.


  • Understand the Interest Free period - Most people are unaware that the interest free period applies only if your balance is paid off completely each month.


  • Know your Credit Card Limit and avoid going over - Most credit cards will charge you an extra fee for going exceeding your credit limit. It is a good idea to check your balance regularly during the month to avoid this unnecessary extra charge.


  • Consider carefully a Rewards card - Rewards cards can sound very appealing but often you can end up paying more in interest payments than you'll every get in rewards. These cards are great for people who have the financial backing or are disciplined enough to pay off their balance in full each month. If you rarely pay off your balance in full each month you would probably be better off with a low interest rate credit card.


  • Consider a Debit Card instead - Debit Cards have the advantage of using your own money to fund purchases. You have the convenience of using your Debit Card for all purchases where Visa is accepted but without the interest charges.