According to Body & Soul Magazine, it’s up to us to get the most, and avoid the worst, from our cards. New federal rules will offer greater protection all-around, from payments to billing, as of July 2010. In the meantime, there are four strategies to keep ahead of the curve.
- Know your limits. Going over the limit on your credit card means you get a penalty and huge interest-rate hike; your credit score can also take a hit. Ideally, you want to use only about 30% of your available limit.
- Beware of double trouble. If you carry a balance you could be paying more due to a method called double-cycle billing. This means that instead of charging you interest on your balance you get charged for the average of the last two months’ balances. Make sure you check the “finance charges” section of your cardholder agreement to see whether this method applies. If so, stop using the card and switch to one with single-cycle billing.
- Don’t mistake debit for credit. Guard your debit card as if it were cash. Don’t use it to shop online or pay for anything when someone can take it out of your sight. Some experts advise making purchases solely with a credit card and opting for a straight-up bank card that gives you only access to cash.
- Get rewarded. Many cards offer rewards: cash back, thousands of points, miles, etc. Find out how your card doles out its rewards. Do you need to request your bonus? Spend it a certain way or certain place? Always open your mail to note any change in terms that might affect the deal you signed up for to save yourself from some nasty surprises later.