Simpler Smarter Savings

Credit cards are a vital part of the global economy. They make it easy to forward payments for goods and help users keep track of their spending. But, as with many things that impact everyday living, credit card risks abound. And they occur for any number of reasons. Informed card holders understand the need to be cautious with all aspects of their credit needs. Above all, they recognize that credit card management requires constant attention. Letting it go is a sure-fire way to attract credit migraines.

One of the most common problems is acquiring more credit cards than is really necessary. Those introductory cards that show up in the mail may appear attractive. Just don’t respond to them. Let the shredder have the last word on unsolicited offers. It’s easy to determine if there is any reason for you to accept or apply for another card. Compare your discretionary spending to your current debt responsibilities. There should be a little left over from your monthly income to give you an operating cushion should an unexpected expense make the scene. Not having that cushion is a sign your credit obligations are potentially in trouble. You may feel economically solid. But taking on more credit card debt can rapidly dispel that good feeling. Too many credit cards—even if they are unused— may also influence any lender you might approach to finance a major purchase wonder if a debt landslide is in your future.

Credit card risks can accrue the moment you agree to accept the low introductory interest rates offered by some card issuers. You must read the fine print to ascertain exactly how long those prime rates will be in effect. Otherwise, don’t be surprised six months down the road that your credit card interest rates have increased by as much as 20 percent. This is an area you can control simply by demanding to know if the low rates will remain in place, or will future rates rise without your notification. Even folks with great credit ratings can be hit with this higher interest rate jolt if they don’t pay attention.

Credit card offers many times come with special deals attached. They might include rebates or reward programs that appear attractive. Keep in mind that credit card issuers are in the business to make money. And whether or not you accept their bonus offers should have no bearing on your acceptance or refusal of a card. The bonuses cost the issuers little when compared to the money they expect to make from you over the years. Shop around for the credit card that best suits your needs. You’ll save money in the long run.