How To Be Wise When You Are Using Credit Cards: Part One

When it comes to personal finance, it pays to be educated

. It pays to know what you are spending your money on, where it is going to, and why. Most people own credit cards, and don't give a second thought about it whenever they whip out the plastic. But think about it now: credit card companies have been in the industry for a very long period of time. They are aware of what they are doing, and there are many "games" that they like to play that can affect you financially. And if you have credit cards right now, welcome to the game. This is a two part series of articles that include tips for dealing with the credit card companies.

For example: say you have a decent job, but you also have eight thousand dollars in credit card debt. You have no savings at this moment. It may be hard to believe that ten dollars a day can dig you out of your hole. But it can, and in only three years at an interest rate of sixteen percent! Doing a few quick calculations could shock and amaze you and it pays to have a panoramic view of your debt situation.

Most people who own credit cards simply accept the terms and agreements, let the companies call the shots, and forget that they are doing business with whatever company they use. Give this one a shot: call up your credit card companies, and let them know that you have received offers for cards at lower rates and request that they lower your rate. If you have paid regularly, they might just negotiate.

If the company says no, let them know that you will be closing your account this week and switching your balance to a competitor who has offered you a better rate. To prove you are serious, casually drop the name of one of their major competitors. This should be easy to do, because you most likely receive pre-approved cards in the mail all of the time. If this doesn't work, ask to speak with a supervisor; supervisors have the power to give you a lower rate right there on the phone, and in a lot of cases, you have the ability to cut your rate in half just by asking. Just like any businesses, credit card companies are always looking to hold on to their good customers.

Returning back to the subject of education. Get to know your credit cards. Take out your cards, and your statements and find out exactly how much your debt is costing you. The average credit card in America carries an interest rate of about thirteen percent, but credit cards have rates ranging from zero percent to as high as forty percent yearly. Then go to a website like creditcards.com to look at all of the competitive offers. But before you make the switch, call the credit card company you use now and request to have your rate lowered using the tips I just mentioned before. To Be Continued In Part Two...

by: Mallory Megan

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