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Banking and Finance  » How to Save Money on Credit Cards

How to Save Money on Credit Cards

Holiday shopping overloaded your credit cards? Worried about the

finance charges you'll soon start paying? Fortunately, you can

use a bunch of different tactics to save money on credit cards.

Some suggestions follow:

Leave Home without It

If you're like most people, you spend more money if you carry a

credit card around. Some studies show that credit card holders

spend 23 percent more on average even if they don't carry a

balance on the credit cards. No investment pays an instantaneous

23 percent rate after taxes. Even business investments. Despite

what one credit card issuer says, you're really better off if

you leave home without it.

Cancel Unnecessary Credit Cards

If you don't carry credit card balances, cancel credit cards

that charge an annual maintenance fee. Lighten your wallet by

canceling all the cards you don't use, for that matter. You'll

only spend more if you use them, anyway.

Ask Your Bank to Waive Its Annual Fee

Call your bank and explain that, because of the annual fee, you

might cancel your credit card. Tell the bank you think it should

waive its annual fee. Your current credit card issuer will

probably gulp and then waive the fee. For a two-minute telephone

call, you'll be ahead by $20 or $30. (By the way, most credit

card issuers don't waive the fee on a gold card.)

Consider an Affinity Card

If you travel on business a lot, you can easily run up $10,000

or more on a credit card as you pay for airline tickets, hotels,

and rental cars. In this case, it's well worth it to pay $50 for

an affinity card. Once you have the card, charge all your

personal and business purchases on it ().

Cancel Credit Insurance If You Have Any

Credit life insurance is usually a big waste of money. You only

need credit life insurance if you know your estate will collect

and you can't get a better kind of insurance. Credit disability

insurance is usually another big waste of money. But, as with

credit life insurance, you may need this insurance if you

require disability insurance and you can't get better insurance.

Cancel Credit Card Protection Insurance If You Have It

Credit card protection insurance is another waste of money. If

some nefarious type steals your credit card and runs up huge

charges, you are probably only liable for the first $50 or so as

long as you immediately tell the credit card issuer that the

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credit card was stolen.

Never Make the Minimum Payment

Pay more than the minimum payment. Paying off high-interest-rate

credit cards is one of the best investments you can make. (The

others are typically investing in a profitable business and

contributing money to a 401(k) plan in which the employer

matches a portion of the contribution.) If you make minimum

payments only, your credit card debt quickly balloons. Very

quickly balloons, I should say. Soon you are paying massive

monthly finance charges.

Get Rid of Your Gold Card

You're paying for the privilege and prestige of that gold card.

But you knew that, right? You can probably save yourself at

least $40 or $50 just by having an old, boring, regular Visa or

MasterCard.

About the author:

Seattle accountant &

author Stephen L. Nelson CPA has written more than 150

books. His bestselling book is Quicken for Dummies, which sold

more than 1,000,000 copies. His books have sold more than

4,000,000 copies in English and have been translated into more

than a dozen other languages.