November 12,2008
-
Credit Card Tips: 201, Pt.4
– Stay clean, preserve what's good.Tip No. 8: Keep your money. (continued)
If you line up future credit card accounts with free balance transfers, you can keep that cash almost indefinitely. It's nice to have large sums of cash in reserve with an interest-free credit card. Your opportunities expand considerably. You may find a 5 ½% CD offer with low penalties for early withdrawal and earn a few hundred dollars with that cash. Sometimes you can escape those shyster accounts where it takes longer to pay off a used car than to pay off a mortgage or get stuck buying a new heat pump on finance that binds you to a very unfavorable financial contract by paying cash set aside from the credit card.
Promotional credit card offers expire, before and after. If you wait till the application offer expires, call customer service anyway. Often they'll still process you. Make a big red note in a conspicuous place reminding you of when the low interest will jump. Plan ahead to transfer any balance from the credit card that is jumping rates.
Just make certain you'll still have the cash on hand to pay off the credit card just before rates jump. Whatever you do, don't get caught behind the 8-ball. Be responsible and make sure you can pay off the debt before the rates jump. If that in doubt, make sure you pay in full every month.
Take advantage of those cash bonus deals for Christmas. Speaking of Christmas, be leery of impulse buying on credit. Dun & Bradstreet report that Americans spend 12-18 percent more using credit cards than they would by paying cash because of impulse buying. It's too easy to do. Don't use credit for ordinary living expenses without storing the cash to back it up, you'll never get out of the hole.
Tip No. 9: Stay clean.
Once you get that sweet deal, strive to preserve it. The biggest banger can occur if a person has a 0% interest account (which is very nice) and they miss a payment or charge over their limit. When that happens, all good things vanish. In additional to sharp penalties, that person forfeits the free interest and, most every other perk that made the account so good. It all goes immediately away. Pay early and pay $1.00 over the minimum. Never be late and never over draw.