8 Tips for Saving
Money On Your Credit Cards
By Stephen Nelson
Holiday shopping overloaded your credit cards?
Worried about the finance charges you’ll soon
start paying? Fortunately, you can use a bunch
of different tactics to save money on credit
cards. Some suggestions follow:
Leave Home without It
If you’re like most people, you spend
more money if you carry a credit card
around. Some studies show that credit
card holders spend 23 percent more on
average even if they don’t carry a balance
on the credit cards. No investment pays
an instantaneous 23 percent rate after
taxes. Even business investments. Despite
what one credit card issuer says, you’re
really better off if you leave home without
it.
Cancel Unnecessary Credit Cards
If you don’t carry credit card balances,
cancel credit cards that charge an annual
maintenance fee. Lighten your wallet by
canceling all the cards you don’t use,
for that matter. You’ll only spend more
if you use them, anyway.
Ask Your Bank to Waive Its Annual
Fee
Call your bank and explain that, because
of the annual fee, you might cancel your
credit card. Tell the bank you think it
should waive its annual fee. Your current
credit card issuer will probably gulp
and then waive the fee. For a two-minute
telephone call, you’ll be ahead by $20
or $30. (By the way, most credit card
issuers don’t waive the fee on a gold
card.)
Consider an Affinity Card
If you travel on business a lot, you
can easily run up $10,000 or more on a
credit card as you pay for airline tickets,
hotels, and rental cars. In this case,
it’s well worth it to pay $50 for an affinity
card. Once you have the card, charge all
your personal and business purchases on
it.
Cancel Credit Insurance If You
Have Any
Credit life insurance is usually a big
waste of money. You only need credit life
insurance if you know your estate will
collect and you can’t get a better kind
of insurance.
Credit disability insurance is usually
another big waste of money. But, as with
credit life insurance, you may need this
insurance if you require disability insurance
and you can’t get better insurance.
Cancel Credit Card Protection
Insurance If You Have It
Credit card protection insurance is another
waste of money. If some nefarious type
steals your credit card and runs up huge
charges, you are probably only liable
for the first $50 or so as long as you
immediately tell the credit card issuer
that the credit card was stolen.
Never Make the Minimum Payment
Pay more than the minimum payment. Paying
off high-interest-rate credit cards is
one of the best investments you can make.
(The others are typically investing in
a profitable business and contributing
money to a 401(k) plan in which the employer
matches a portion of the contribution.)
If you make minimum payments only, your
credit card debt quickly balloons. Very
quickly balloons, I should say. Soon you
are paying massive monthly finance charges.
Get Rid of Your Gold Card
You’re paying for the privilege and prestige
of that gold card. But you knew that,
right? You can probably save yourself
at least $40 or $50 just by having an
old, boring, regular Visa or MasterCard.
Bellevue
WA certified public accountant Stephen
L. Nelson CPA has written more than
150 books. His bestselling book is Quicken
for Dummies, which sold more than 1,000,000
copies. His books have sold more than
4,000,000 copies in English and have been
translated into more than a dozen other
languages.
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