Part 17 (2/2)

So, paying high interest on credit cards, if you can possibly avoid it, is foolish If you regularly carry balances, you have already figured that out

Yet, nearly half of American households carry a balance fro to the Federal Reserve You can view this statistic a couple of different ways First, it's sha eous interest rates That's even truer if much of the balance includes dinners out, unnecessary electronic gadgets, and other highly optional charges

The second way to look at the statistic is that half of A a balance ”because everybody does,” it just ain't so

Also, don't take coe balance on credit cards is 10,000 MSN Money coluainst this so-called fact, which originates from CardWebcom It has been reported by the media literally hundreds of times in recent years CardWebco credit card debt was 9,840 per household Weston points out that the number only includes households that have a credit card, which elie all those households with zero balances because they don't have cards The stat also includes business credit cards, which can have huge balances, especially with business travel What business credit card balances have to do with household debt, I have no idea Just as iardless of howfinance charges

The point is, not everybody is carrying credit card balances, and you shouldn't either

As I alluded to earlier, part of the reason people run balances on credit cards is because credit cards don't see over plastic to a cashi+er doesn't sti over a fistful of twenty-dollar bills Indeed, studies have shown that consumers spendpresence of card readers at every retail cash register Retailers want you to overspend

So, even people who pay off balances everyjust by virtue of the pay

2 Know Your Perks

Despite all those negatives, credit cards have advantages-for ”deadbeats” You would think credit card ”deadbeats” is a term for people who don't pay their bills But, in fact, deadbeats are what credit card companies call customers who pay off their balances each month These customers don't pay the issuer any interest or fees In essence, they give thees of credit cards and suffering none of the downsides Don't feel too sorry for credit card coh They stilla credit-card deadbeat is a good thing

One of the advantages of credit cards is they help establish and , which translates to real es and car loans when you have a better credit rating And you et cheaper auto insurance, as so your pre the credit card company between the merchant and your cash That's why it's best to use a credit card for online and mail-order purchases in case a dispute arises

Cards have e benefits too Most people overlook these perks They include purchase protection, extended warranties, merchandise discounts, travel insurance, rental car insurance, price protection, lost luggage help, favorable exchange rates on foreign currencies, and others

I won't go into details about these offerings because they vary by card But ate all the perks of credit cards you carry in your wallet You can read about the benefits online at the card-issuer's Web site or call the phone number on the back of your card and ask, ”What are my card perks?”

QUICK TIP

Merchants can't require aa Visa or MasterCard credit card A provision in their agreees of any amount Of course, there's notto make a small sale, except report them to the credit card co your card doesn'tsure the signature on the back is legible Itbetter terms on your credit card account

One secret of the credit card industry is this: As bad as card issuers sometimes treat their customers, they hate to lose them

It's very expensive to acquire new custo the card-or better yet threatening to transfer your balances to another card-can be effective with customer service representatives on the phone

The point is you have leverage And you should use it at least annually to i the card This rean in 2008

The first thing to do is ask your card issuer for a better interest rate, even if you don't carry a balance That's because, for better or worse, credit cards are a short-terht have to break the cardinal rule of ”never carry a balance”

Call the number on the back of the card, and just ask If you're unsatisfied with the answer, ask for a supervisor Still not satisfied? Call back in a feeeks and do it again The better payment history you have, theto do is call back and ask for a higher credit limit This is a tactic discussed earlier about how to improve your credit score Be sure to ask, ”Howmy credit report?” That's because an official inquiry into your credit report could te for so your li your ratio of credit used to your credit li your limit is to avoid over-the-limit penalty fees, if you're the type of person who nearlyofwhich blockbuster to rent next, head over to the documentary aisle and check out the 2007expose on how credit card companies prey on the weak in society In fact, their profits depend on it

The final thing to ask your credit card company is for fees to be waived, even if it's your fault If the card company hits you with a 40 late-payment fee or over-the-limit fee, call up and just ask for theood customer and it's your first slip-up, they will almost certainly waive the fee It's worth a phone call

How to Choose a Rewards Credit Card

In choosing any credit card, the priet the lowest interest rate you can and pay off the balance Forget rewards cards, which typically have higher interest rates

But if you're what the industry calls a deadbeat,you pay your credit card bill in full every month, you probably want a rewards card

How to Choose a Rewards Credit Card, 1-2-3

1 Go online

2 Choose cash back