Play the credit card right for better management of finances

Although there may be cards that are cheap and don`t charge interest on balance transfers or new purchases, the applications are most often turned down, and borrowers may at times find themselves being charged unfairly if the cards are not used properly. There are a few guidelines given below where one can play by the rules and get things right.

One has to be realistic while applying for a credit card, especially if they have not been regular with payments or have missed payments or have huge debts that have been borrowed on multiple cards, etc. The best thing to do under such a situation is not to apply for the best interest-free cards cause the application would be turned down in all likelihood. This rejection of the application in turn would be reflected in the credit history and this would put further restrictions, while seeking credit.

In spite of this, one can still get a cheaper credit card and cut down on the interest that is being paid. There are websites with "smart search" tool that can give a realistic picture of what rate will be offered to you. This information will neither be stored nor will it affect the credit history. This information could be used while applying.

Always use the direct debit option as this can help save you in case you forget to make your monthly payments or miss payments. This is one way of ensuring that at least the minimum payment is made each month. A better option would be to work out a module where all debts are paid before the end of the interest-free period and then set up direct debit to ensure that no further interest is paid on these debts.

With the new rules in place, card companies will have to see that the most expensive debts are paid with the payments that are made. So, if there is an interest-free balance transfer deal, as well as fresh purchases made, then the payments will automatically take care of the debt that is being charged interest first.

However, one must ensure that there are no charges for not spending on the card or other unexpected charges. Make a note of the interest that would be levied after the end of the grace period. Balance transfers will still carry a transfer fee of 3% although it is interest free.

Bryant Park

Bryant Park is a financial consultant for one of the companies listed on Wall Street. He writes on a variety of topics ranging from credit cards to different loans that can be availed by consumers. He holds a bachelor degree in Financial Services from Dartmouth College.