Credit Secrets & Tips Blog

1. Use them carefully 

Credit cards offer great benefits, especially the ability to buy now and pay later. But you’ve got to keep the debt levels manageable. If you don’t, the costs in terms of fees and interest, or the damage to your credit record, could be significant.

2. Choose them carefully

Don’t choose a credit card just to get freebies (T-shirts or sports items) or because there’s no annual fee. Look for a card that’s best for your borrowing habits.

Example: If you expect to carry a balance on your card from month to month, which means you’ll be charged interest, it’s more important to look for a card with a low interest rate or a generous “grace period” (more time before your payments are due).

3. Pay as much as you can to avoid or minimize interest charges.

If possible, pay your bill in full each month. Remember, paying only the minimum due each month means you’ll be paying a lot of  interest for many years, and those costs could far exceed the amount of your original purchase.

4. Always pay your bill on time

You’ll avoid a late fee of about $29 or more. But more importantly, continued late payments on your credit card may be reported to the major credit bureaus as a sign that you have problems handling your finances.

And if your credit rating gets downgraded, your card company could raise the interest rate on your credit card, reduce your credit limit (the maximum amount you can borrow) or even cancel your card.

Late payment on your credit card also can be a mark against you the next time you apply for an apartment or a job.

5. Protect your credit card numbers from thieves

Never provide your credit card numbers - both the account numbers and expiration date on the front and the security code on the back - in response to an unsolicited phone call, e-mail or other communication you didn’t originate.

When using your credit card online make sure you’re dealing with a legitimate Web site and that your information will be encrypted (scrambled for security purposes) during transmission.  Click here for more tips about how to protect yourself when you shop online.

Major credit card companies also are offering more protection by providing “zero-liability” programs that protect consumers from the unauthorized use of their card.

In general, only give your credit card or card numbers to reputable merchants or other organizations purchase.

If you are low and moderate-income taxpayers, then you should take advantage of IRS programs and bank services that can help you save more money for future goals, including buying a home or funding a child’s education, tax preparation, qualify for tax credits, etc.

IRS-coordinated Volunteer Income Tax Assistance (VITA) program that provides free tax-preparation services for qualifying individuals.

Also, IRS has the ability to direct deposit tax refunds in up to three different checking and savings accounts at up to three different U.S. financial institutions.  It encourages you put part of your refunds into both savings and checking accounts.

If you are interested in obtaining free tax return preparation, you should call the IRS at 1-800-829-1040 or go to www.irs.gov/individuals to locate a VITA site.

Federal law provides specific rules that the card issuer must follow for promptly correcting billing errors. The card issuer will give you a statement describing these rules when you open the credit card account and, after than, at least once a year.

In fact, many card issuers print a summary of your rights on each bill they send you.

You must notify the card issuer in writing at the address specified for billing errors when you find an error, and you must do so within 60 days after the first bill containing the error was mailed to you.

For this reason, keep your credit card receipts and promptly compare them when your bills arrive.

In your notification letter, include your name, your account number, the amount of the suspected error, and the reason why you believe that the bill contains an error.

The card issuer must look into the problem and either correct the error or explain to you why the bill is correct. This must occur within two billing cycles and not later than 90 days after the issuer receives your billing error notice.

During the period that the card issuer is investigating the error, you do not have to pay the amount in question.