Getting The Best Deals On Credit Cards

If you take the time to match the proper credit card with your payment and spending patterns you can save a great deal of money. If you don’t, you stand to pay hundreds or even thousands of dollars of needless interest or fees. As credit card users we all have different spending and payment habits, but they usually fall into one of just a few categories: you might pay off your credit card bill completely every month, you just pay the minimum payment due every month keeping a manageable balance outstanding on your card, or you could be one of the millions of people whose credit card balances stay at or near the maximum amount allowed. Which ever one of these payment profiles fits you, there are hundred of credit card products to choose from that can help you get the most and pay the least when using your “plastic”.

The credit card service industry is a very competitive market place today. Many difference incentives are offered to you by credit vendors in an effort to win your business. You’re probably familiar with most of these: low interest, cash back rewards, zero percent balance transfers, award points, special cards with pretty pictures on them. Many people, me included, are bombarded weekly by credit card offers that come in the mail at an alarming rate. If you’ve chose a credit card from that selection, you’ve probably chosen the wrong one for your spending habits.

Every credit offer that is ever made to you must come complete with a Truth in Lending Disclosure - it’s the law. In the cases of those offers that come in the mail, I make it a game to read this disclosure before the whole thing goes in the trash (which is almost always before it makes it past the garage). The interest rates must be posted in those disclosure statements, and the ones that come in the mail are almost always not the best deal that you can get. As a matter of fact, very often they are humorously high, bordering on predatory.

While you were scrutinizing that credit offer that came in the mail, or the one that they were offering at the mall kiosk, you may have noticed that the focus of their sales pitch was on one of these four types of rewards: 0% balance transfers, cash back, low interest rate(s) or award points. Also, whatever their area of focus, they didn’t exactly shine in the other three areas and may actually be extremely predatory in one or more of those. Here are a few tips you can use to choose the right credit card for your payment and spending habits:

1) Do you have a history of paying off the complete balance on your credit card every month? If so, you shouldn’t be too concerned about the interest rate on your credit cards. However, don’t discard interest rate completely! Keep the grace period in mind - that’s the amount of time between when you purchase something with your credit card and when the bank begins to charge interest on that purchase. Often credit card companies charge interest beginning on the date of the purchase - others offer a grace period that lasts until the end of the calendar month, or for 30 days. A longer grace period can help you save money. Also, if you have balances on other credit cards that are charging interest, a card that offers 0% interest on balances transfers may be the choice for you. Or choose a card that offers reward points - your next vacation could be free!

2) If you keep a modest balance on your credit card (somewhere between 0% and 40% of the maximum amount of credit allowed) then you should keep a keen eye on the interest rate charged on that outstanding balance, but you may also want to look for a credit card that offers cash rewards for its use. This usage pattern is most common, and is actually the credit card usage pattern that favors your ability to build good credit; it shows creditors that you are capable of managing your balance and also makes you an attractive customer because you maintain a positive balance.

3) If your credit card balance is constantly at or near the maximum that you are allowed, then the interest rate that you pay is everything. Do not rely upon credit card marketing material found in email, regular mail or mall kiosks to provide you with the best deal - you need to actively shop for the best interest rate that you can find to control the amount of money that you pay in interest on your balance.

4) No matter what your payment pattern is be sure to pay your bills on time and always pay the minimum due at the very least. Credit card vendors have a nasty habit of ratcheting up the interest rate on your credit cards if you pay too little or too late - they sometimes do it without telling you, and your late payment on one card can affect the interest rates on all of your other cards. Be sure to read your credit card statement carefully every single month, and pay special attention to the interest rate that they’re charging you.

As with most financial dealings, an informed consumer stands to save money. In the case of credit cards the amount of money that you stand to save by optimizing your credit cards to your payment and spending habits can amount to hundreds or thousands of dollars per year. Get in a habit of reviewing your credit cards and shopping for better deals on a regular schedule; you can almost always find a better deal than the one you’ve been sitting on for the past year.