Surf For Less Expensive Credit
You can transfer the balances from high interest-rate credit cards that charge 18%-24% credit cards to lower interest-rate credit cards that charge 6% to 10% to save you in paying more interest on high interest-rate cards. If you have been paying your monthly credit card payment on time, you should be able to qualify for lower interest-rate cards. You can either make request on your current credit card issuers to lower your credit cards’ interest rate or shop around for the best deals of credit cards that offer low interest rate. What the issuers are looking for in your credit report and determine the interest-rate offer to you is your payment record whether it is on time or not.
Credit card companies look at potential debt because you may have several credit cards from department stores, oil companies, or other credit card companies. Even though you are not using them, these cards are seen by the credit card issuers as potential borrowing that must be counted when looking at your debt-to-income ratio. The best strategy is to close down little-used or inactive accounts and concentrate all of your outstanding credit on the lowest interest cards you can qualify for.
Passive credit card surfing is the process of moving balances from high-interest cards to cars with permanently low interest rates. It is called passive surfing because your only have to it once. These issuers can afford to offer such deals because there are more selective about who they give card to. Because surfer far fewer losses from bad debt than their higher interest brethren, they can afford to charge lower rates and still earn a profit.
Active credit card surfing is the process of constantly switching your balance from one introductory ate to another. You probably get offers in the mail all the time for the 2.3 percent to 3.9 percent introductory rate. After the introductory period expires, the rate is likely to jump back to normal rate which is 15% to 18%. Hence, you transfer the cards balance to a new card which has introductory low interest rate. In order to keep your debt-to-income ratio in line, it probably best to close the old account when your move to the new one so your total outstanding debt potential remains the same.
Avoiding Annual Fees
If you are in the habit of paying your credit card bills off in full every month, then, interest rate is not affecting you. You can cut your costs from $20 to $100 a year if you switch from a card with an annual fee to one without such a fee, although credit card without annual fee may have higher interest rate.
Accumulating Frequent-Flyer Points
A great way to earn free flights to wherever you want to go is to sign up a frequent-flyer credit card. In general, you will earn one frequent-flyer points fro each dollar you spend on the card, no matter where you use the card. Before you sign up the one of these programs, look at which airline you use most frequently and apply for a card from that airline. This way, you can combine the miles you earn from spending with miles earned flying. By putting all of you spending on one card, you have a better chance of earning free trips more quickly than if you spread the spending among several frequently-flyer cards.
Earn Special Rebates
Many companies offer opportunities to earn rebates on purchases made with their card cards. As with the frequent-flyer cards, the best strategy is to concentrate your spending on one or two of these rebate cards to accumulate the largest rebate possible. Using these rebate credit cards can provide significant savings if you are planning on buying these products and services anyway.
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