5 Tips to Control Credit-Card Use
The holiday shopping season is fast approaching, and for many consumers that means breaking out the plastic. Despite the importance of reducing debt in a recession, nearly a third of consumers plan on using their credit cards this holiday season, according to data from the National Retail Federation.
If you're planning on plastic instead of paper for your holiday shopping needs, consider these tips for keeping your credit-card use under control.
Choose rates over points: Most Americans have more than one credit card in their wallet. Your cards probably provide a variety of benefits: one for low rates, one with reward points or even one that contributes to your favorite charity. But while airline points are a nice bonus, such cards often carry higher interest rates, which add up if you carry a balance on that card. When you reach for your plastic this year, make sure you pick the one that charges the lowest rates.
Watch your limits: If you do decide to go with a single card as your consumer weapon of choice, be aware of its credit limit. Maxing out a card can have many negative consequences, beyond any embarrassment you might feel when your card is declined at the checkout counter. Not only can the credit-card company charge a nasty over-limit fee and bump up your interest rate, maxing out your card can trigger similar rate increases among other cards. And lastly, a maxed out credit card can negatively affect your credit score because the ratio of debt to available credit is a big determinant in calculating your score. One rule of thumb: Keep your balance at 30% of the available credit to avoid any slide in your credit score.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV