Before You Switch Your Credit Card Yet Again

One way or another, we are all tempted by low teaser rates on credit cards. Many of us do have some credit card debt and wouldn't it be nice to not add more on top of what you are paying. Or at least that's how we like to rationalize it, don't we? Before you switch over to that zero interest credit card, or shop around for a new card, keep these tips in mind.

• How long does the zero rate last and will you change your spending habits? It does no good to switch your balance over to another account..and then continue to charge it up! Divide the balance by the number of months. Vow to pay that amount each month. If you can't do that, then you would be better off with a low interest loan from your credit union instead.

• See what the APR is once the zero interest period ends. Most of these teaser zero interest cards jump to some skyhigh rate after the "getting to know you" period is over. Are you prepared for that?

• Decide NOW how and when you will pay off the balance. Six months may sound like a long time away. It is not...start with a plan before you even apply for that new card.
  

• What other benefits does the card have and will you use those? I'm talking about purchase protection, extended warranties, frequent flyer miles. However nice they may sound, be sure you would use some of this stuff and actually need it. I know someone who buys every little gadget (aka cheap junk) their credit card company advertises in a monthly insert...conveniently put in there with your bill.
  

• Does the card have an annual fee? There is no excuse for getting a credit card with an annual fee. With all the choices out there, this is an unwise choice. Find another card with similar offerings with no fee.
  

• Does the card have a grace period? Search the verbage for those words. If you don't find it, don't go for it. You want to have a credit card that has at least a 25 day grace period, or else if you are even one minute late, the company can start charging you interest back from the day of purchase.

• Don't overdo the credit carding. Too many open cards will hurt your credit score. The jury is still out if the constant closing and opening of credit card accounts can hurt your score. Many like to transfer their balances from zero to zero interest card..but really, is this a positive thing? Stop charging, live within your means and pay off the debt you have.

Do you use credit cards? Do you think they cause you to spend more money (it hurts to pay with cash, doesn't it)? Do you carry a balance or do you pay off your card every month? Do you frequently change credit cards? I am a big fan of the American Express Blue Cash card. We have it because we do pay off our balances each month, so we can really take advantage of their UNLIMITED cash back offer. Most credit cards have a cap at $300. The Blue Cash card was the only one I found that didn't have any such restrictions.