Using multiple cards

Possessing one or two cards is usually fine but there are people who apply for every credit card that comes their way. This is not the right thing to do, as there is every chance that you will end up with credit card debt on several different credit cards. More the number of cards you own bigger will be the problem of managing them. It gets difficult to remember the due dates for all the different credit cards.

Balance transfer too many times

Some credit card customers have the habit of going for balance one time too many. They get into a habit of clearing the debt on one credit card with another. This means they will always have an outstanding debt. This might not reflect well on the credit history either as credit cards will look at you suspiciously. Moreover, you might not always get the best terms possible.

Missing out on payments

One thing you should never miss is the due payment date of your credit card. It is imperative that you check your bill and pay it on time. Most card issuers usually give you a grace time of around 20 days after sending you the bill. There are two problems in not paying your bills on time. Firstly, you will be charged with a late fee. You will also have to pay interest on your outstanding credit card debt and that could be substantial. Every missed payment also shows up on your credit file. This taints your credit history and lowers your credit score. The more inconsistent a consumer, the lower the credit score will be.

Shopping for rewards

A lot of credit card holders tend to shop a lot specifically for the reward points, air miles or discount offers available on the credit card. However, this is one habit that must be avoided by card holders. This is because when you shop without need, just for the rewards you tend to end up with a big credit card debt that becomes hard to pay off. Moreover, you might end up paying interest on the debt as well which adds up over a period of time, eating into your savings made on offers.

Not checking the monthly expense report

Credit card companies will send you a monthly expense report along with the final bill. This is for your reference to make sure the bill you see is actually a representation of your expenses. You must check it thoroughly to make sure that there are no fraud expenses. Credit card fraud could happen from time to time and card issuers allow you to deny making purchases which are unfairly charged on your account.

Advantages of using credit cards

• You do not need to pay immediate cash. This ensures that you can still buy the product or service and pay for it in the future.
• The statement that is delivered to you at the end of every month helps you keep a track of the expenses that you incur every month.
• Eliminates stress at the airport: when you use a credit card to buy your plane ticket it is viewed as non suspicious by the FFA.
• Protection from bankrupt airline: you are also protected from wasting your money on the air ticket if the airplane goes bankrupt.
• Stop payment rights. A very big advantage of credit card while purchasing is the stop payment rights. Supposing you buy a product and the product does not get delivered to you in time or is broken when it arrives to you, you can stop payment for that particular product by informing the bank.
• Improve or rebuilt credit: using credit cards is the easiest way to improve your credit history. In case you have had a bad credit history, you can undo that by paying up your consecutive bills in time.

Precautions while using a credit card:

• Try not to spend more than 15% of the credit limit of your credit card.
• Before withdrawing money with your credit card ensures that you are aware of the interest charges.
• Under no circumstance are you supposed to lend your credit card to friends, relatives etc. It is solely meant for your personal use.
• You must immediately report the credit card company in case you lose your credit card. This will ensure that you are not held responsible for any fraud that is done with your credit card.
• Do not let credit card lure you into buying things that you do not need.

The plastic money is the most widely used financial merchandise on the globe. Over 80 percent of homes support at least one credit card. And, if you are a fan of the green money, then it won’t be surprising, if you are stacking five to eight cards in your wallet. Today, to boost your status and follow the league of powerful citizens of the world, possessing credit cards is the latest fashion. However, you should know how to mage your credit score and repayment of credit card debt, if you seek to be a responsible citizen of the world as well.

Having multiple credit cards can be beneficial if handled properly, but staying on top of more than one account can prove both time-consuming and challenging. This is particularly true if you have more than one card that earns rewards because you might not be paying close enough attention to the types of perks you are earning or taking care to be sure that you’re maximizing those rewards programs and getting the most out of your cards.

It’s also tricky to keep track of your bills when you have multiple accounts, knowing exactly where to send it what amount and when. It’s very easy to lose track of things and think that you’ve already sent in a payment when, in fact, you haven’t. Having multiple credit card accounts to worry about puts you at greater risk for amassing late payment charges, which are not only annoying and expensive, but have a negative effect upon your credit score.

The only way to effectively manage multiple credit card accounts is to proactively take the necessary steps to get everything organized. Doing so will save you time, money and make your finances a lot less frustrating. Here’s how:

Coordinate

If you have more than one credit card account, your payment due dates may be scattered all throughout the month. If that is the case, it is much easier to be late on payments or even miss one entirely. It also means that you have to put in a lot more time monitoring your accounts and checking in to see whether or not a payment is due. By coordinating the due dates on all of your cards, you lessen the possibility for one or more of them to fall through the cracks. Call up each of your card issuers and tell the customer service representative that you want to change your payment due date and most of them will likely be amenable to doing so. Schedule as many accounts as you can afford to come due at the same time. This way you can sit down once a month or even twice a month if need be and pay all of your bills in one fell swoop as opposed to having to worry about it one a week or every few days.

Pay Online

Nowadays, pretty much every credit card comes with the option to make payments on line. Instead of going through the tedious process of writing a check and dropping it in the mail, all you need do is go to your creditors website and set up an online account, log in and transferring funds right from your checking account. Not only do you spare yourself the cost of a stamp but it is better for the environment. It is also quick, easy and your payment gets applied to the account faster with zero possibility of your payment getting lost in the mail.

Automate Payments

If you are the type of person who always, no matter what, has enough money in your checking account each month to cover all of your expenses, you should definitely look into setting up automated payments to your credit card. You can choose a specific due date on which a pre-determined amount will automatically be transferred from your bank account and applied to your outstanding credit card debt. This is a great way to make sure that you never miss a payment.

The only potential catch is that you must be certain to keep enough money in your checking account in order to avoid overdraft fees.

Consolidate

It might be wise to consider shifting a couple of your current balances onto a single credit card to reduce the overall number of accounts you owe money on. Having three or even four lines of credit to keep track of is an easier undertaking than attempting to manage six or seven accounts. If you find an appealing balance transfer offer, you may even save money in interest charges at the end of the day.

The idea behind credit card arbitrage is to invest the money drawn from a low interest credit card in something that would hopefully generate a higher return or at least help you pay of the interest. Some daring cardholders also make use of zero interest promotional cards (usually the promotional period is about a year) to turn a profit. One way to do this would be to invest the money from the card into a savings account, which offers a high interest rate. This will allow you to make each monthly credit card payment on time. When there is a change in the rate of interest or the end of the payment period is reached the money withdrawn from the bank can be used to pay of the balance.

This may all seem very easy at first. But do keep in mind that the interest rates may change with little or no warning. However this usually happens as a result of late or missed payments. As a result this may hamper any chance of making a profit.

The profitability through credit card arbitrage depends on the line of credit available. The more money can be borrowed, the higher will be the return once the borrowed amount is invested in an account that yields a reasonable interest.

Credit card arbitrage can really hurt your credit score. The credit score usually goes down in the beginning because a large chunk of the credit line is borrowed for investment into other accounts. Late payments or missed payments could damage your score even further.

Credit card arbitrage is not for everyone. Due to its risky nature it should be employed by only those few consumers who rake in a substantial income and who are good at managing their finances.

This is when the already slippery slope leading to credit card debt becomes even more treacherous. If you give into the urge to pull out your plastic and overspend simply in order to meet your gift buying obligations on time then you may have won the battle but you will have certainly lost the war. No matter what holiday you’re shopping for, the only way to resist the pull of holiday shopping panic is to sit down and formulate a sound, sane plan of attack.

Recalculate Your Budget

Or, if you never made a budget in the first place, sit down immediately and make one right now. Visa advises that consumers spend no more than 1.5% of their annual income on holiday presents for family and friends. Holiday shopping without a budget in place is a fast track to January debt. Determine the total amount you can afford to spend for holiday gifts (be sure to factor in things such as gift wrap, hostess gifts, holiday decorations, etc.) and subtract the amount you have already spent. The number you wind up with is what you have to work with. For example if your total budget is $500 and you have already spent $325, then the remaining amount you have to spend on last-minute gifts is $175.

Make A List

Write down the names of who you have left to shop for and, according to your newly readjusted budget, determine how much you can afford to spend on each person. It is important that you stick to that number and not overspend in the throes of last-minute holiday generosity. If you run out of funds before buying a gift for everyone on your list, get creative. Make IOU’s to be redeemed in January or head to the kitchen and start baking some holiday treats. A gift does not have to be expensive to be appreciated.

Use The Internet

There is no sense in running around in a frenzy searching for items that may already be off the shelves until the New Year. This late in the game, there is a very real possibility that stores will have run out of certain items, especially the popular ones. Before you hop into the car and zoom off to join the throngs at the mall, take a moment to go online and search for the store’s website to see if they have the gift you want in stock.

Be Flexible And Go With The Flow

If you can’t track down the specific gift you have in mind for someone, instead of driving yourself crazy be willing to choose something else instead – as long as the new item is comparable price-wise and doesn’t blow your budget. A willingness to improvise is a good shopper’s best quality!

If you choose one these credit cards you will be taking advantage of some of the best deals on the new market next year. These cards offer great rewards, low fees and interest rates. While we can’t understand every consumer’s personal financial situation, those who pay their balance in full every month should look for a rewards card so they can reap the benefits of the payment management. Those who keep a balance every billing period should research low interest rate credit cards and how they can help keep their debt manageable. All consumers should stay away from cards with annual fees, unless they desire to spend a considerable amount of money.

Based on our research here are the best credit card deals we’ve found for 2012.

Chase Freedom Visa – This card is good for those who pay off their full balance every month. Good news, when you sign up for this credit card you become eligible for a $200 cash-back bonus after you spend $500 on your card within the first three months. Each quarter the 5% cash-back categories change and can include categories such as retail centers, supermarkets, drug stores, gas stations, etc. There is also 1% cash-back on all other purchases made.

Blue Cash Everyday – This is a great card if you’re looking for benefits and rewards. This American Express card earns $100 cash-back when you spend a minimum of $1,000 within the first three months.

Citi Diamond Preferred – If you carry a balance then this card is for you. Upon signing up, consumers will receive zero percent APR on all purchases made in the first 18 months of having the card, in addition to zero percent balance transfers. Also, consumers can get $200 worth of credit after purchasing $500 worth in online purchases within the first three months of having the card.

Equipped with these credit cards and some good financial savvy, 2012 could be a good year for you and your credit cards.

Two Options

There are two different ways to pay your bills online. You can do it via the bill payment feature built into your credit card issuer’s website, or you can go through the site of whichever bank your checking account is at.

If you opt to make payments using your credit card issuer’s website, the transaction is initiated by your creditor – the entity that is to receive the funds. If you have several different cards all issued by different banks, you will have to log onto the site of each one and navigate through their specific online payment process.

If you prefer to initiate your bill payment from the website of the bank at which your checking account is held, double-check before you begin that online bill payment services are free. These days, most banks extend the service at no charge to their customers with checking accounts. One of the ways that this method is helpful is because your available checking account balance can be easily referenced while you are coordinating payments and you will be able to see everything all in one place – including the payment schedule for your other bills.

If you happen to have a credit card that is issued by the same bank as your checking and savings accounts, you can simply transfer funds from one account to the other to pay your bill.

Helpful Hints

No matter which system you decide to use you will want to be certain that your payments will be submitted to your credit card issuer on time. To do this, you must make sure you have an understanding of the terms of the bill payment system. Pay special attention to how long it will take a payment to be posted to the account and when the payment will be delivered should it be scheduled for a date that falls on a holiday or a weekend.

When scheduling a payment for the first time, enter the necessary information carefully to make certain that you provide the exact billing address and your correct account number. If you are sending payments to different cards, make sure you double-check everything before you confirm any payments to assure yourself that you are sending the proper amount to the proper creditor.

Once you begin to use the Internet to pay your bills electronically, you will find that it is much quicker and more convenient than dropping a check in the mail. You can even set up automatic reoccurring payments that will eliminate the worry of making late payments and help you avoid incurring penalty fees.

The way to prevent this from happening is to examine the attitude you have towards your card. While it is important to strengthen your credit history and credit score by using your card from time to time and to pay your creditor on time, if you rely heavily on your card to make impulsive purchases that you don’t actually have the money to afford then you need to start thinking about your credit card differently.

Not only can credit card debt cost you a lot of money if you carry a balance that accrues interest at a high rate, but if you are late making just a single payment you may be subjected to penalty fees, an interest rate hike as well as potential longer-term consequences such as having your credit score lowered. A low credit score will make it more difficult for you to get approved for a mortgage, an auto loan or even an additional credit card.

If you are currently in credit card debt and you feel that your bills are piling up around you, the first thing you should do is call your creditors. Be sure to do this before you fall behind on any of your payments, because if you fall behind you will not be in the best position to negotiate a different repayment schedule. Depending on the length and strength of your relationship with the particular company, you may even be able to negotiate a reduction of your interest rate or coax them into eliminating certain fees such as a late fee. It is even possible in some circumstances to close the account, freeze any interest from accumulating further and then you can pay off the remaining balance on the closed account in regular monthly installments. While the downside of that option is it may have a negative impact upon your credit score, it is better in the long run than defaulting on the account.

Another option, if you have good credit, is to apply for a low or no balance transfer credit card and consolidate all the debt from your other cards onto it. This will make it easier to manage what you owe and make sure you are submitting your payments on time by giving you only one monthly payment to keep track of. Also, if the interest rate on the new card is lower than that of your old card or cards, you could save yourself some money on interest in the long run. If the card’s low rate is only for an introductory promotional period of time, make sure that you plot out a repayment plan to eliminate the debt in its entirety before the intro period expires.

If you want to solicit outside help managing your debts, contact a not-for-profit credit counseling service.

Don’t Budge on Your Budget

The first thing to do this holiday shopping season is to set a budget and then adhere to it. If need be, glance over your financial records for the beginning of the year, specifically your credit card bills from last January and your bank account statements. Determine a total amount you can reasonably afford to spend on gifts this year and use that as your guide. Enlist the help of your children to research and shop for fun, inexpensive gifts for the people on your list and set maximum dollar amounts on each gift. Thoughtful gifts don’t have to be expensive. Resist the temptation to overspend your budget on your credit cards by telling yourself that you will charge now and figure things out in the New Year. Planning ahead is essential to making a budget work. Involve your kids in the planning and make it fun.

Stuff Your Child’s Stocking With a Savings Account

One of the best things you can do for your children or young relatives is to open a savings account on their behalf in their name. Then they can learn how to keep tabs on their account by tracking all deposits and withdrawals. Teach them how to set savings goals for themselves and turn putting money away into a game. Some banks offer checking accounts for teens as long as an adult co-signs the account. This is a wonderful way to encourage teenagers to practice good money management as they maintain a record of withdrawals, deposits and balance their account at the end of each month. This will also set your teen up for eventually opening their very own credit card account.

Curb Your Impulses

Bring your children holiday shopping with you and teach them to avoid making impulsive purchases by leading by example. The advertising industry is constantly trying to entice consumers into spending more and more money, and during the holidays ads and sales go into overdrive. This can lead easily to overspending – especially on credit cards. Teach children to wait 24 hours before making a big purchase in order to think things over and determine if the item is really needed or wanted. Waiting is an important component of saving.

Make – and keep – a New Year’s Resolution to Save

Beginning with your very first paycheck of the New Year and your child’s very first allowance, establish a portion that will be put aside for savings on a regular basis. Developing consistent savings habits at an early age is a precious gift that will last your child a lifetime.

How Much?

While the savings goal for an emergency fund varies from individual to individual, a good rule of thumb to start with is try to put aside an amount that will adequately cover all your livings expenses for three to six months. That should provide a decent foundation for most people, and from there you can tailor your emergency fund to fit your own situation. Ask yourself:

• How much time would you want to have to find a new job?
• How flexible is your lifestyle – could you live with a roommate or do you have dependants to care for?
• How many fixed expenses – such as auto loans, tuition bills or a mortgage – do you have?

All of these factors should be considered when determining the amount you would like to have in your emergency fund. Obviously, the less flexible you are, the more people you have depending on you and the more fixed expenses you are responsible for, the more money you want to set aside for emergencies.

Just the Basics

While three to six month’s worth of expenses may seem like an overwhelmingly large sum of money, it’s more manageable when you eliminate discretionary spending and only focus on the essentials. Sit down and realistically calculate a number that you could survive on by reviewing your fixed expenses over a previous several month time span. Factor in things like rent, utilities, food bills, car payments, taxes and insurance.

A Few Tips

If you feel like your budget is already stretched thin and that you have no “extra” money to put aside for an emergency fund, here are a few tips that may come in handy to free up a few bucks for your savings account:

• Set up an automatic deposit into your savings account from your checking account.
• Bring your lunch to work.
• Have a garage sale.
• Don’t drink alcohol when eating out.
• Downgrade your telephone or cable service.
• Pay attention at the grocery store and stock up on non-perishable items when they are on sale.

Know Your Other Options

If you find yourself in a financial bind with your emergency fund exhausted, know that you may have other options available to you rather than loading up your credit cards which can be a slippery slope of debt. Inquire whether you company’s allows you to borrow money from your 401 (k) or investigate obtaining a home equity line of credit.