Monday, January 16

Safely Navigating Credit Card Land

You'll Need One Heck of a Navigation Device!

Do you like your money? If you do, "where" you get your credit card is one of the most important money decisions you will make in your life.  Here's a little navigation help.

All credit cards,  even the best of them, are designed to do one thing...encourage you to borrow money. Period. If you're like most of us, you'll "borrow" money using a credit card your whole life. At times, you'll use it wisely (you'll pay your card balance off in full each month). But most of the time, you'll use it to create an instant installment loan (you'll pay your balance off a little bit each month).

So here's the problem: The money you burn by paying off a little bit each month varies wildly. Get the wrong card and you're in for a lifetime of wasting money paying rip-off rates.

Plus: Every card company tries to convince you that their card is the best for making those nice monthly payments. Baloney!

Here's what happens if you don't choose the right card:

  • You waste money paying unnecessary annual fees: Plenty of credit cards still charge annual fees–some up to $400 per year!
    • But dozens of cards are still available with no or very small annual fees.
  • You waste money paying high monthly interest: Many credit card companies do not automatically give you the lowest interest rate your credit history deserves. Why should they? Their idea is to maximize their profit on you.
  • You lost money because of deliberately-confusing fine print:
    • Zero percent now, but in six months the interest rate goes up dramatically, and wipes out that zero percent saving you initially received–you'll pay higher rates for years after that.
    • Late on your payment or over your limit? Some credit card companies still find ways to hike up your interest rate.
  • You waste money by making balance transfers. Balance transfers can give you fantastic money savings–but ironically most don't. Why? Simply looking at the difference in interest rates between two cards may not tell you the real cost difference between them.

And the biggest waste of money: Keeping with the wrong card for years. Many people stick with their original credit card for decades. Stick with the wrong card for even ten years and you could be throwing away thousands of dollars.

Why throw away all that money? Do this one simple thing...and do it now:

Dig up a credit card statement from your current credit card company and compare it to the credit union's credit cards, see if they can give you a better deal. You do not have to talk to the credit union, but you might want to. Credit union credit cards are generally much cheaper than bank credit cards.

But don't just take our word. Check out what "The Capitalist Tool", Forbes says.

The credit card world makes a hornets nest look inviting. Take the time now to make sure you're dealing with the credit card company that is best for you.

Want more info? Work through our FoolProof Solo "Sucker Punch" module on credit cards! It's painless, quick and you will thank yourself all the way to the bank or credit union.

Alright, that's it for now... I hope this helps. Good luck out there!

Cheers, Will

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