Try These Ideas To Save Money
Credit cards are not all alike. How much you pay for the convenience of utilizing one or more credit cards will depending on the issuing bank, your credit score, the card offers you apply for. After a divorce, as you make decisions about establishing credit cards in your own name, finding the best deals can help you save money in fees and interest charges.
ANALYZING A CREDIT CARD OFFER
]The first step to finding a great credit card deal is to select a card that has no application fee or annual fee. Next, look at the APR (Annual Percentage Rate). The Introductory APR may be much lower than the standard APR, and the account will automatically switch after a pre-determined period. The Introductory APR or standard APR is the interest rate you’ll wind up paying on balances. Credit card issuers charge different interest rates for different types of purchases. For example, you’ll typically pay a higher interest rate for cash advances, and a different rate for balance transfers. Charges can really start to add up.
WATCH OUT FOR LATE-FEES, OTHER CHARGES
Just one late or skipped payment can result in your credit card’s APR changing to a default APR rate, which could be upward of 29.99 percent or higher. Credit card issuers also heavily penalize consumers in the form of flat-fee charges for late payments (up to $39 or more), or if you go over your credit limit (which could result in an additional $39 or more fee). If you’re traveling overseas and attempt to use your credit card, be prepared to pay a three percent currency exchange fee on each purchase.
CREDIT CARDS THAT OFFER REWARDS
Beware of credit cards that offer rewards. These credit cards often have higher annual fees and interest rates. Thus, if you wind up maintaining a balance, the money you pay in fees and interest can quickly become much greater than the value of the reward. The best way to benefit from using a major credit card with is to pay off your balance monthly. Avoid late fees and over-credit-limit fees. Otherwise, at the end of a given year, you’ll probably figure out that even if you received one free airline ticket, you could have purchased several round-trip airline tickets with the money you threw away. Also, based on how rewards are issued for a specific credit card, make sure your spending habits will allow you to benefit from the reward offered. Figure out the value of the reward. If you only charge $10,000 per year on a card, but to earn a free airline ticket, you need to spend$25,000 per year, that offer may be of little use. Airline frequent flier miles often expire after 12 months.
SHOP FOR THE BEST CREDIT CARD OFFERS
Before signing up for a new card, read the Terms and Conditions, document, and Cardholder Agreement. This information is much more detailed than the card offer itself. If you’re applying for a credit card online, you may have to search the card issuer’s Web site for the Terms and Conditions page. Once you’ve established a new credit card account, pay attention to mailed or e-mailed notices from the bank or card issuer indicating changes to your account’s Cardholder Agreement. Terms are subject to change, which could result in a good credit card offer transforming into a costly one. To shop for the best credit card deals, visit www.creditcards.com, www.bankrate.com, www.cardratings.com or www.credit.com.
REDUCE YOUR BANKING CHANGES
Just as banks and credit card issuers make money with fees, the same is true for checking and savings accounts. Thanks to the Internet, it’s no longer necessary to utilize a local bank to handle all of your banking. This allows you to shop for better deals, potentially outside of your area. “Banks are punishing consumers with a relentless onslaught of more and higher fees,” said Ed Mierzwinski, Consumer Advocate for U.S. PIRG (www.uspirg.org). “Worse, many banks are hiding fee increases, by adding new fees for services that used to come standard with your checking account.”
Before opening a new checking account, determine what fees are involved. Some of the fees associated with a checking account include:Check printing fees ATM fees, Bank teller fees (for making an in-person deposit or withdrawal, for example), Insufficient funds fees Debit card usage fees, Online banking fees, Check stop payment fees, Check writing and deposit fees (applied if you write more than a pre-determined number of checks, or make more than a pre-determined number of deposits per month),Monthly account maintenance fees. Ideally, you want to do business with a bank that offers low fees, but beware of misleading advertisements that boast Free Checking. While the bank may not charge you to open the account, there are often other recurring charges. Also, you may be required to maintain a pre-defined minimum balance.
According to Arkadi Kuhlmann, CEO of ING Direct, “Getting ahead financially is a little like losing weight. There’s only one sure-fire way to do it: You have to eat less and exercise more. The tried-and-true secret to accumulating wealth is just as simple, and just as unwelcome to some ears: Spend less and save more. Unfortunately, many banks have a financial stake in your mistakes and don’t want to remind you that it’s that simple. The average overdraft charge has climbed to $34, and banks collect about $10.3 billion each year through these deductions. If banks really wanted to help customers, they would provide them an overdraft line of credit connected directly to their checking accounts.”
In terms of a new savings account, in addition to finding a bank or financial institution that offers zero or very low fees, focus on who pays the best interest rates. Don’t forget to include credit unions and banks that allow you to do your banking entirely online in your search. One way to start saving on bank fees is to contact your bank after reviewing your monthly statements and determine how to reduce fees. If not, consider looking for another bank. By seeking out better credit card deals, choosing to do business with banks offering the lowest fees and best interest rates and then taking steps to improve your credit score to qualify for the best rates possible on loans, your overall annual savings will be significant.
