Tuesday, August 6, 2013

Credit Facts

5 Reward Card Pitfalls
Having a rewards credit card can sometimes feel like you’ve got a free ticket to giveaway city. With cash back, and redemption privileges on points you accumulate, it’s tough to resist the urge to use your plastic on every purchase you make. That temptation is exactly what those card companies use to make money. These common pitfalls are designed to trick even the thriftiest shopper into making a mistake.
A study from Experian also finds that more Americans, 51-percent, are managing two or more credit cards to handle their finances. Before you get overwhelmed, read on for the warning signs that signal perhaps you’ve relied too much on credit.
Cash Back Rates Don’t Hold Up
Offering cash back on purchases makes it seem like you’re getting a bigger discount than you actually are. Be wary of a threshold for those payments, as some cards might allow a cap on the amount of money that qualifies for the offer. If your card offers “rotating” rewards, chosen from pools of potentials products, be sure to activate those rewards as needed. Even yearly rewards sometimes require customers to opt into them. Scan for the rewards you want and click here to find credit cards with signup bonuses, air line miles and more.
You Don’t Qualify for the Teaser
The teaser rate is designed to look that good because it gets people applying, but if you don’t have an “excellent” credit score you might not apply. It helps to order your free credit report each year from the government website, and review your report for errors. Have these errors removed wherever possible, then continue to make your payments on time and try not to add to debt. If you’ve been good and still find yourself declined for the best rates possible, negotiate for other benefits that might be equivalent.
Missing Due Dates
Everyone knows that missing payments thirty days or longer can lead to some financial hot water, but miss those dates on a rewards card and the stakes go up. Missing payments hurts your score, but it may also affect your eligibility for the programs that you want to apply for. If you feel like you’re in danger of non-payment, call your credit card company and try to negotiate a new payment schedule. It’s a small step, but it might save you from costly late fees and disenrollment in rewards programs.
Misusing Balance Transfer Cards
A balance transfer card offers you a lower APR for your high balance credit cards. This is to save you from making minimum payments for 45 years, not so you can run up a new balance. Choose balance transfer cards that have sensible term limits that you can meet. Then pay off your debts timely and save money in interest. They can be beneficial, but remember that that low rate is often introductory and will wear out after a few months to a year.
Red Flags for Your Credit

More Americans are relying on a dual credit card household, but the act of actually applying for multiple credit cards quickly is a red flag for creditors. Avoid racking up too many high balances, and keep your revolving debt as low as possible. Make a few affordable purchases each month, and pay more than the minimum balance to get the most out of your credit cards.

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