Are you inundated with credit card offers and can’t decide which one is best for you? Are you using your credit cards wisely? Your BBB brings you news from the Federal Deposit Insurance Corporation (FDIC) Consumer Newsletter Winter 2013/2014 that can help you take charge of your credit cards.
Selecting a Credit Card
First of all, according to the FDIC, before you apply for a credit card, order a copy of your free annual credit report at www.annualcreditreport.com or 1-877-322-8228 and correct any mistakes. “Your credit reports play a large role in what credit you will qualify for, so it’s important that they be accurate,” stated Jonathan Miller, Deputy Director for Policy and Research in the FDIC’s Division of Depositor and Consumer Protection (DCP).
If you find mistakes in your credit report, you must send a letter in writing to the credit reporting agency that sent your report. Send your letter by certified mail, return receipt requested. Keep copies of all documents. For more information about how to dispute inaccuracies in your credit report, see the Federal Trade Commission’s (FTC) publication Disputing Errors on Credit Reports.
Next, decide what type of card best fits your needs. How will you use the card? Will you pay off the balance each month or carry a balance from month to month? If you expect to carry a balance from month to month, a credit card with a low Annual Percentage Rate (APR) will likely be best. However, if you will be paying the balance in full each month, you might want to look at whether there is an annual fee or a rewards program.
The FDIC recommends not just looking at the offers you receive in the mail but shopping around for credit cards from several different lenders and looking at three things in particular:
*APR : annual cost of credit; usually three types (1) for purchases, (2) for balance transfers, (3) for cash advances. Don’t be lured by low introductory offers that will go up when the promotional period ends.
*Fees: annual fees, balance transfer fees, cash advance fees, penalties for late or returned payments; find out how often the fees will go up.
*Rewards: find out if you will be able to qualify for the rewards program, if there are spending requirements, and what you can get with your reward points.
Using a Credit Card
Once you receive your card and begin using it, examine your credit card statements each month and report errors quickly. If you notice a billing error, contact your credit card company immediately. For more information on reporting errors on your credit card statement, see Disputing Credit Card Charges.
Other tips to help you use your card wisely are:
-Read all communications from your lender. Often your credit card statements contain important messages about fee or rate increases.
-Make all required payments on time.
-Pay as much as you can to avoid or reduce fees and interest charges.
-Monitor all transactions of an additional user you add to your credit card account. You might consider setting a spending limit.
-Protect your card from fraud. Do not give out your credit card number, expiration date, or security code on back to an unsolicited phone call or e-mail. Even if it is someone claiming to represent your bank or your credit card company, it’s best to hang up and call the bank or credit card company’s reported phone number yourself, not the phone number of the unsolicited caller.
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