November 24, 2009
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Surviving Black Friday, Pt.2
Fees will get you every time.2. Stay below your credit limit – Going over your credit card limit will do more than initiate an over-the-limit penalties, it will also push your interest rate up. Avoid these penalties by getting organized and keeping accurate records on spending. Check your card balance regularly online. Whenever giving your credit card information to hotels, car rentals, and other businesses to hold product or reservations, inquire into the amount of the hold. These holds reduce the amount of credit available until the actual debit or credit card amount is processed. You'll want to read more about this card blocking at www.ftc.gov/bcp/edu/pubs/consumer/credit/cre11.shtm).
3. Avoid unnecessary fees – credit card companies charge hidden fees that most consumers are not aware of. These fees include cash advance fees, transfer balance fees, and payment returned or insufficient funds fees. Some companies even charge when you pay your bill via telephone. Make yourself aware of these fees and the transactions that trigger them. If you need a cash advance, be proactive by estimating the amount you'll need over a period of a month. Draw the full amount out at one time to avoid additional credit card fees. Visit www.federalreserve.gov/pubs/shop/default.htm#fees2 for more information on these types of fees.
4. Pay more than the minimum payment – Of course paying your credit card balance in full each month is the most prudent decision and should always be your goal. However, if you can't pay the balance in full, it is always wise to pay more than the minimum payment due. Paying more than the minimum payment due helps you in a number of ways. First, your lender is more apt to keep you credit flowing if you are making your payment on-time and paying more than the minimum payment. Paying more than the minimum will also help you to lower the amount of interest you'll pay over time. See the Federal Reserve's Credit Card Repayment Calculator at www.federalreserve.gov/creditcardcalculator to calculate a repayment schedule.