Today’s post is a guest post from Green Panda Treehouse.

How many times have you heard ‘read the fine print’? Sometimes we hear things so many times it becomes white noise. With credit cards, though, not reading the fine print can cost you a good amount of money.

“With more than a billion cards in our wallets, we floated some $937 billion in outstanding credit-card debt as of last November, according to the Federal Reserve. The average card-holding household has $9,659 in credit card debt, up from $2,966 in 1990.”

Source: Time Magazine

Make sure you’re not being charged an annual fee.
Why should you be charge a fee for owning a credit card? There are many credit cards out there that have no fee. Call your credit card company and see if they can waive it.
Saving with no annual fees: $29-$89

Review all the fees for the card. How much are late fees? When are payment due? You may have the payment delivered to them by the right day, but they might consider it late if it comes past their cut off time, which can be 12noon.
Savings on late fees: $25-$35
Savings on over limit fees: $29-35

Know your interest rate after the introductory period.
No interest rate lasts forever and the average interest rate is 14.7 %.  Check your last few statements to see if they changed any of the rates or fees, since they can do this. USA Today report how surprised one man was about his rate:

“Tommy Newsom was shocked when his bank nearly doubled his credit card interest rate this year, to 27%, for no apparent reason. A customer rep told him the law allowed the bank to do so, and that was all the justification it needed.
‘I never missed a payment,’ says Newsom, 63, of Mesquite, Texas, who owes about $5,000 on the card.”

Source: USA Today

It doesn’t hurt to call and see if credit card customer service department can lower your interest rate.

See if your credit card company charges you to make over the phone payments.
Some credit card companies make some money is by charging you $15 to receive a payment over the phone. Try to mail/send your payments a week early. If  you have to pay $15 to avoid $39 or higher, though, suck it up and pay the fee.

Know exactly how the rewards program works. If you have cash back or flier miles reward card, make sure you are maximizing its full potential. Sometimes you find that the card costs more than the credit card rewards they give.

How do you handle credit cards? Pay in full each other or carry a balance?

Note from Aryn: I was raised not to carry a balance, but had two situations in my life where I ended up with credit card debt. Both were of the “starving student” variety and I worked hard to pay them off as quickly as I could. My goal is to never carry a balance ever again.


One Response to “How to Save Money By Reading Your Credit Card’s Fine Print”

  1. Ruby on December 18th, 2008 10:10 am

    Using a credit card and a right checking account wisely is a great way to save your money! Here are the rules of mine:
    1. Do not over spend, stick to your budget. Pay off balance and never pay for interest. Those interest I’ve saved can pay for my groceries.
    2. Watch your billing cycle. If you have to spend more than your budget, try to pay with your credit card when this billing cycle is over, you won’t have to pay large amount of bills at once, so you can pay off the balance without paying interest. And remember you already spent a part of budget for the coming month, start saving money from somewhere else and spending less.
    3. Circle out the spending that you should pay attention to when you get the bills. Like something that you can write off, things are not supposed to buy, etc.
    4. Don’t throw the bills away after you pay them. Keep every monthly bill in order. It is always a good thing to look back the numbers.
    5. Open a checking account that pays you interest. Make sure you have enough of money in your checking account to pay the entire month expenses, and you earn tiny interest before you use them to pay the bills. It’s better than nothing.
    6. Use online bill pay tool. It saves me lots of postage and easy to schedule payment.
    7. If you don’t have saving and want to start it, but find it difficult, save money first then use the rest to pay the bills. You’d rather paying interest for carrying some credit card balance to help you start saving, than paying interest to credit card company for nothing. At this point, tight up your belt for next coming bills.

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