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Simple Tips for Taking Control of Your Credit Cards
(ARA) - Credit cards are a great convenience, and it might be hard to imagine going to the mall or even the grocery store without one. But for many people, credit cards are a two-edged sword. If you don’t keep a tight rein on them, you can quickly find yourself in a situation where you’re paying exorbitant interest rates, or only paying the minimum balance each month.
Here are some tips for using your credit cards wisely.
* The first thing to do is to get organized. This is a good time to obtain a copy of your credit report and make sure the information is accurate. Does the credit report list your current and past addresses accurately? Are there any loans or credit cards on your report that don’t belong to you? Have any of your creditors reported late or delinquent payments in error?
* Next, review your credit cards and make a list containing important information about each card. Include the account number and contact information, especially the 800 number to call in case your card is ever lost or stolen. Make sure your ATM card is on the list as well.
* Now that you’ve got a list of your credit cards, it’s time to evaluate them. Go back over your recent statements to double check your interest rates. “Many credit card companies entice you with low introductory offers that expire after a certain time period,” notes Leuer. “You may find out that instead of the 1.9 percent you thought you were paying in interest, your rate has gone up -- way up.”
Another hidden cost is the annual fee charged by some credit card companies. These fees can range from $25 up to several hundred dollars for gold or platinum cards. Take stock of the fees you’re paying. If you have a credit card that carries a hefty fee, you may need to shop around for a better deal.
* As you take inventory, you may discover that you have cards you’re not using. If so, consider canceling them. Your credit rating is based in part on available credit and it could work to your disadvantage if lenders see that you have thousands of dollars of unused credit at your disposal. On the other hand, it’s a good idea to keep one or two cards that carry a zero balance, just in case.
* If you aren’t in the habit of checking your monthly statement, you should vow to do that during the coming year. Hold on to your receipts throughout the month so you can reconcile charges when your bill arrives. “It’s important to read your bill every month to look for mistakes such as double billing, uncredited refunds for items you returned, charges that you didn’t authorize and other errors,” says Leuer. “If you find a mistake, contact your credit card company immediately.” (That list is coming in handy already!)
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