WINNING THE CREDIT-CARD GAME

WINNING THE CREDIT-CARD GAME

Some banks are eliminating the standard 25 or 30-day grace period

within which you may pay your bill within being charged interest. This

is the normal grace period before interest kicks in. But this is slowly

changing. For example, some banks are offering extremely low fixed

rates, but without a grace period. These cards will charge you interest

from the date it processes your charge slip.

If you usally pay your bills in full within the normal grace period, it is

best you avoid no-grace-period cards. The 25 or 30-day garce period

is more financially significant for you than a lower interest rate.

However, if you carry a balance each month, you're better off with a

lower interest rate. In this case, a lower interest rate can save you

more money than a grace period would.

Most banks and thrifts charge interest from the day they process your

charge slip when you use your card to get cash. In addition to this,

some cards are now assessing cash advanced service charges

based on a percentage of the amount received. It used to be that

service charges were based on a fixed fee, regardless of the amount

of transaction.

If you avoid interest charges by paying off your bill each month, seek

out a card that offer very low interest rates plus a grace period on

purchases. Some institutions periodically offer cards with no fee for

the first year as a promotion.

Don't be lulled into getting "premium" credit cards such as

"goldcards" and Premier VISA. The only significant premium with

these cards is the extra amount you pay in higher annual service fees.

Besides the fancy finish of the card, the only other benefits you get

with premium cards are travel insurance and the extra protection if

your card is lost or stolen. Since by law, you are only liable for up to

$50 if your regular credit cards are lost or stolen, the zero liability you

are getting from premium cards is hardly worth the extra money.