Over-reliance on credit can wreck your financial future,
but if you don't want to live life without your plastic,
here are six steps you can take to find credit card relief,
prevent additional debt loans and credit rating damage from
following you around like a lost puppy.
First of all, credit cards are not created equally. Before
you choose one, think carefully about your spending habits
and how you plan to utilize the card.
If you must charge your purchases, try to make a smart
decision by using a card that will do something for you--
<em>and not to you.</em>
Annual fee: with so many credit cards on the market, it
generally doesn't make good sense to pay an annual fee for
the privilege of carrying a piece of plastic in your
pocket. However, there are cards that can make a rate
guarantee, such as prime interest rate for life. This
might be a smart decision in the event that you regularly
carry balances on a card.
Membership perks: some cards offer really cool "benefits"
in exchange for carrying their card. Some of these extra
benefits can be seen as value added services, such as
travel insurance or extended warranty protection. Be
careful though, because the devil's in the details.
Carefully read your card membership agreement because a lot
of these cards have a list of exclusions longer than your
right arm.
Credit monitoring: as a consumer you're very well aware of
the importance in having up-to-date information about what
is on your credit rating. Because your credit score is
based upon your financial performance, it makes sense that
you would want to know immediately if someone posts
negative information about you on your credit file.
Default rates and penalties: before you sign on the dotted
line and accept a credit card, be certain of the terms and
conditions surrounding the use of your account.
Credit card companies almost universally charge default
credit card rates if you make two consecutive late
payments, but there are also card issuers out there that
will increase your APR if you're late in making payment to
any creditor.
Default rates can sometimes be as high as 30% -- or more -
so be careful and know ahead of time what you're getting
into.
Customer service and online payment: nobody plans on having
a problem with their credit card, but if you do, you want
to know that excellent customer service is only a phone
call away.
A growing number of credit card companies are outsourcing
their customer service to foreign countries, where
communications could be a challenge. In addition, some
companies are even utilizing prison inmates as customer
service representatives.
Balance transfer checks: find out what your prospective
credit card company's balance transfer rules are, because
some companies will mail you "free" balance transfer checks.
If they do, be careful how you utilize them, because there
are credit card companies that will permit you to draft a
check in excess of the amount of available credit to which
you are entitled, which can result in excessive fees and
charges being assess to your account for going over your
credit limit.
There is no such thing as a free lunch, and this is
especially true for your credit card and the company
standing behind it.
If you decide you must have a credit card, make sure it's
one that will do something for you, rather than being just
another way of hurting your credit rating or increasing
your debt loan obligations with sky-high credit card rates
and fees.
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Darrin Roseborsky is a Refinance Specialist with OMAC
Mortgages, seminar speaker and president of the Roseborsky
Group and HomeRefinanceCoach.com. Darrin shows people how
to MAXIMIZE their equity PROPERLY and how to choose options
that make the MOST SENSE for their situation! An example of
exactly how this works, is at:
http://www.homerefinancecoach.com
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