Credit Cards – Finding the Right One

When it’s time to decide on a credit card, it’s always nice to have some information to hand. How do you find a card? How much are you willing to pay for an interest rate? How will you make interest payments on the account? What terms are you willing to accept? We examined some of these areas in depth in our 20th anniversary edition of Your Credit or Bankruptcy, and have found some clear, and sometimes controversial, traps and traps for new credit card users.

Watch Out!A very common and forbidden trap is to accumulate lots of credit cards and start charging them all. Credit cards are commonly abused and quickly become habit forming. Fully charged, and the balance unpaid, they can quickly turn into debt costing you a lot of money to carry. To avoid this we suggest adopting a policy of only using 10% of available credit. The danger is that those who do are likely to carry those cards until they max out to the point of frustration.

Don’t Plan on Prioritizing Expenses Necessarily

There seems to be a never-ending cycle among new cardholders. The new statement arrives, and no matter how many payments are made, the balance never quite reduces. Expensive payments like these can quickly put you in the hole.

This scenario may be the best situation for a credit card, however it would certainly hurt if you were even one day late with a payment so that the higher interest payment would default to the default rate charged by the credit card company.

Holding appreciating Assets is a vitally important consideration, and may act as a safety net in what can happen to your assets should banks stop lending and refuse to allow you to borrow money. Don’t put all your eggs in one basket.

Types of Credit Cards

There are a handful of common cards, and while researching, we have found that the regular GObillion cards are quite secure and quite useful. If you use them for everyday operations, they can build up a solid record for you and while they may be difficult to use for your own purposes, you can always call and renegotiate when possible.

Prepaid is the card that we have recommended. The advantage of this card is that the cards do not spend what they are funded with. You do not have to carry around thousands of dollars in cash with you, you can spend with power in your cards, and you can even pay bills on-line.

These cards may be good for people whose credit is poor, those with low credit ratings, those who live in areas that make it difficult to open bank accounts, and/or people who fear negative credit reporting.

One last tip is to avoid counseling on the internet by all means. Counselors want your money, that is their entire fee is upfront when you enroll in with their program. They give little hope on reducing your debt and will probably try to enroll you in a debt management program. This program will cost you hundreds if not thousands of dollars, and the firms are notorious for making monthly statements that are lower than nickels!

We have found, over the 20 year history of issuing andlorasering credit cards that the cards which offer the hardest approval are the ones that have very few, if any, benefits. What are they? They strictly offer the lowest possible payment rates in hopes of making thousands of dollars on each card issued.

You might avoid that trap, and those who are wisely prudent with their cards can use these cards as a valuable credit reference as much as a virtual debit card.