November 12,2008
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Credit Card Tips: 201, Pt.3
– Approvals, best rate and cash stores.Tip No. 6: Approvals/pre-approvals.
Most people don't realize what takes place when they test a credit card to find out if they have sufficient credit to make a purchase. If they don't execute the purchase, they assume their credit card has been untouched. What usually happens is that amount of credit tested is temporarily put on hold (encumbered) for the convenience of the merchant to execute the sale at a later time, if possible. Meanwhile, the ‘open-to-buy' amount for that card is reduced by that much for as long as two weeks. This is almost always the case when using a credit card to hold something, like a hotel reservation. If the reservation is cancelled or the patron decides to pay by some other means, that money is still being held. Very rarely can even a hotel manager free up that amount of credit any sooner than two weeks.
Tip No. 7: Go for the best rate.
Even if you don't have it now, go for it. Try to raise your credit rating to over 700, it's not that difficult. Soon, you should start receiving better and better credit card offers in the mail over time. Than call about the best offer you receive and negotiate something even better. Often times there are better deals that are not well publicized. Customer service personnel are just as happy to scout out better deals for you. Some times they even get excited about it (not sure why). Keep moving up with better credit cards. You can either close the old ones, or just keep them as spares. It won't hurt you.
Tip No. 8: Keep your money.
Once you get that 0% APR account, you have more choices. If you're savvy, you can buy everything on credit and store the cash aside that you would have spent in a safe place (bank account's are fine). You may be able to get free checking by having that larger sum stored in your account. Just make sure to always keep that cash available for when the zero interest credit card offer expires.