14 September 2013
Are You Credit Card Smart? Be a Better Credit Card Consumer

A credit card is often considered a necessity in today’s economy. Most of us never leave home without at least one credit card in case of emergency. We make online purchases with credit cards. We use them to pay for everything from dinner to a two-week cruise.

But…are you credit card smart? Here are some suggestions to help you make the best use of your credit cards:

Never make a late payment.

First, you’ll probably be assessed a late fee, though it might be waived under unusual circumstances.

Worse, your interest rate can increase – sometimes to close to 30%. Often, it takes at least six months of on-time payments to get your rate back down, costing you more in interest than necessary.

Finally, if you miss payments regularly, it shows up on your credit report – and late payments are never good on a credit report.

Pay on time to avoid the headaches, and be sure to allow enough time for the post office to deliver your payment if you pay by paper check. Payment in the mail doesn’t count as payment received, so don’t wait until the last minute.

Don’t use your credit card at an ATM.

Chances are you have a credit card and an ATM card. When you use the ATM card, money is deducted from your account, so there’s no interest to pay.

On the other hand, if you use your credit card at an ATM, you’re actually taking a cash advance. Cash advances are usually charged a higher rate of interest than purchases, so use your ATM card to get cash, not your credit card to take a cash advance on which you’ll pay interest.

Know the restaurant when giving your credit card to the waiter.

Once that card leaves your sight, you don’t know who handles it, or what they do with it.  Skimming employs an inexpensive device that records all your credit card information with a swipe, which may put you at risk for identity theft. When dining at an unfamiliar restaurant, it’s safer to pay with cash. And remember to check your credit card statements each month to check for any unauthorized transactions.

Never give your credit card to anyone.

Not your spouse, not your kids, not your relatives. It’s like handing off the keys to the vault. You have no control over how that card is used…or abused.  Consider your credit card a valuable asset – one that should be protected.

Never toss credit card statements in the trash.

That statement has your credit card number, name, address, card issuer – virtually everything the ambitious dumpster diver is looking for to run up charges using your identification.

Invest in a shredder to make credit card fraud a lot harder for the bad guys who paw through your “trash” looking for information. Be sure to also shred credit card offers, which thieves can use to apply for an account in your name.

Never give out your credit card number over the phone unless you make the call.   

Scammers know that, with the right pitch, they can get your credit card number over the telephone. It might be a call about a “missed” utility payment that can be cleared up with a credit card, or a charity calling for a donation. If the caller asks for a credit card number, don’t give it. Ask for a request in writing. Ask to speak to the utility’s billing department.

If you didn’t make the call, don’t give the caller any credit card information. You don’t know where it will end up.

Keep credit card information secure at home.

Your credit card is in your wallet. The kids know it. The plumber knows it. The burglar knows it. The house cleaning crew knows it. Everybody knows it.

Keep your credit card in a secure location, locked up from prying eyes and unauthorized credit card users – even in your own home.

Get a card that delivers rewards.

If you’re a flyer, sky miles for every purchase can add up quickly. Discounts, free accommodations – even cash-back rewards can lower the total cost of ownership of a credit card.  On the other hand, if you don’t travel a lot, why get a card that rewards you with discounted plane tickets? Go for a reward you’ll actually use.

Click here for information about credit cards* from Nevada State Bank, which offer rewards points, cash back, or our low rate.

With these helpful tips, you can learn how to use your credit card smartly to save on interest and fees, and help prevent theft and fraud. It’s not hard to do – once you know the importance of that little piece of plastic.

 

*Credit cards subject to credit approval. Certain terms, conditions and limitations apply. See Consumer Credit Card Agreement and Disclosures for details. Offers subject to change at any time.

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.

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