|
The following Credit Card tips can help you make the most of your Credit Card. They can help you to save on unnecessary charges and minimise interest payments.
- Choosing the right type of Credit Card - if you usually have an outstanding balance on your credit card, it is worthwhile checking out the current interest rate on your card. Interest rates vary widely and can range from 0% up to a whopping 20% p.a.
- Beware of 0% Balance Transfer Offers - 0% Balance Transfer offers can sound too good to be true. It all depends on how you use plan to use them. If you are likely to reduce your outstanding debt quickly and within the period offered 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 are probably wasting your time. Many 0% balance transfer cards revert to a high interest rate when the offer period has expired. Chances are you would be better switching to an overall low interest rate credit card.
- Avoid Late Payments - If you’ve ever missed a credit card payment, you’ll know that the fee for a late payment can be quite substantial. It can be worth setting up an automatic direct debit to pay your card by the due date to avoid any late payment fees.
- Always pay more than the minimum payment - If you choose to pay only the minimum payment you will almost never reduce your credit card debt and pay an excessive amount of interest charges.
- Avoid Cash Advances - 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.
- Check your Credit Card Limit and avoid going over - Most card charge you an extra fee for going over your credit limit. It’s a good idea to check your balance regularly throughout the month to avoid this extra charge.
- Don’t be tricked by Interest Free period - Most people are unaware that the interest free period applies only if your balance is paid off in full each month.
- Think twice before considering a Rewards card - Rewards cards can sound very appealing but quite often you end up paying more in interest payments. These cards are great for disciplined people who pay off their balance in full each month. If you rarely pay off your balance in full each month you would be better off with a low interest rate credit card.
- Consider using 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.
|
