Credit Card Shopping: Match Your Spending Habits to Save Money

If you take the time to match the proper credit card with your payment and spending patterns you can save a great deal of money. If you don’t, you stand to pay hundreds or even thousands of dollars of needless interest or fees. As credit card users we all have different spending and payment habits, but they usually fall into one of just a few categories: you might pay off your credit card bill completely every month, you just pay the minimum payment due every month keeping a manageable balance outstanding on your card, or you could be one of the millions of people whose credit card balances stay at or near the maximum amount allowed. Which ever one of these payment profiles fits you, there are hundred of credit card products to choose from that can help you get the most and pay the least when using your “plastic”.

You might be one of the hundreds of thousands of consumers who are spammed weekly by credit card vendors either by email or regular mail, and if you’ve chosen a credit card from the selection that has shown up in your mailbox you’ve probably not chosen the best one available for your particular spending pattern. Credit cards are big business today. Credit card vendors offer a huge array of incentives to lure your business. Four of the most common of these are cash back rewards, award point good for travel services and merchandise, 0% balance transfers and low interest on outstanding balances. Some even offer you the ability to custom design the picture on the card!

Every credit offer that is ever made to you must come complete with a Truth in Lending Disclosure - it’s the law. In the cases of those offers that come in the mail, I make it a game to read this disclosure before the whole thing goes in the trash (which is almost always before it makes it past the garage). The interest rates must be posted in those disclosure statements, and the ones that come in the mail are almost always not the best deal that you can get. As a matter of fact, very often they are humorously high, bordering on predatory.

If you look carefully you will find that most credit card offers that you receive focus their sales pitch on one of these four types of rewards: low interest, cash back, award points, 0% balance transfers. Furthermore, whatever area of their focus, they don’t perform well in the other three and may actually be extremely predatory in one or more of those areas. Here are some tips you can use to make sure that you choose the right credit card for your payment and spending profile:

1) If you pay off the complete balance of your credit card every month, you don’t need to pay too much attention to the interest rate of the credit card, but “Not too much” does not mean “No Attention“! Do pay attention “grace period” associated with purchases on your credit card - the period of time between when you make a purchase and when interest begins to accrue. A longer grace period is better. Choose a credit card that offers rewards, or if you have a balance on another credit card that is charging you interest, pick a card that won’t charge interest on balances transferred.

2) Most credit card holders maintain a manageable balance on their credit cards - that means a balance somewhere between 5% and 40% of the maximum balance allowed. If this is your usage pattern, you should of course seek a low interest rate credit card, but you may want to also take advantage of some of the other benefits offered such as cash back on purchases. This shows responsible use of your credit, and makes you an attractive customer to credit vendors; you have proven that you are a good credit risk - you pay your bills in a timely manner - and you maintain a positive balance. That makes you a good potential credit customer.

3) Don’t depend on credit card marketing material that comes in the mail to help you find the best deal - shop for credit cards that offer the very lowest interest rate available, and the easiest way to do this by far is on line. If your credit cards are always max’d out - at or near their limits - then interest is everything. You should absolutely find the card with the lowest interest rate available. You might even choose to pay a small annual fee to secure a card with a lower interest rate than you might find with a fee-free credit card. With a low interest rate you can take control of the flow of interest that you pay on your outstanding balance.

4) In all cases, whether you maintain no balance on your credit cards or the maximum available, you need to be sure to make all payments on time and in the right amount. Many credit card vendors will increase your interest rate if you make payments late - it’s in the Truth in Lending disclosure statement - and they do it without giving you any notice. Read your statement carefully every month to make sure that you know what you’re paying.

The smarter you are as a consumer, the better your chances are to save serious money; this is true in most business and is true with credit cards. You can save a ton of money by shopping for the right credit solution - find one that fits your spending habits and your payment schedule and it can amount to hundreds or thousands of dollars per year in savings. Be credit smart: develop a habit of reviewing the credit cards in your purse or wallet several times a year and always be shopping for better offers. Chances are, if you’re using a credit card that you’ve had in your wallet for over a year or two, there are better deals out there.

About the Author:

Kris has made a living helping individuals with their credit needs and low interest credit card product options for over twenty years. Click Here to shop for low interest, no interest, reward, prepaid and 0% balance transfer credit card products.