Paying Early And Other Mistakes Credit Card Experts NEVER Make


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Using credit cards wisely was the cornerstone of the personal finance education I received from a very young age. In fact, it’s probably one of the chief reasons I decided to carve a career from writing about credit cards and other personal finance topics.

These days I often spend hours reviewing credit card offers, and still learn new things every once in a while. And I still see card users making fundamental mistakes in the way they manage their cards.

Here are some top mistakes some people make that I wouldn’t.

1. Paying your bills late

The golden rule of credit card use is: Always pay on time. How do I avoid paying late? First, I always demand paper statements. Getting a letter in the mail makes my payment so much more urgent than an email reminder that my statement is ready. Conversely, I always pay my bills electronically though online banking. This removes any uncertainty related to the Postal Service.

But however you choose to stay on top of your charges, do it. The only reason you should ever pay late is if you absolutely, positively can’t scrape up the money. Bruising your credit score simply because you spaced

2. Paying less than the balance in full

After paying on time, paying balances in full is the most important habit you can develop. Paying in full and on time avoids interest and fees while entitling you to free use of your bank’s money for up to 55 days. Not paying in full means paying interest, which translates into handing over significant amounts of money for basically nothing. This is not the road to riches.

3. Paying your bills early

Use electronic payments – not paper checks and snail mail – to dictate precisely which day money is transferred from your account to your card company’s. This maximizes the interest earned on your checking balance – admittedly a fraction of a percent these days, but still something – while closely regulating your cash flow.

4. Paying late fees

Being a credit card expert doesn’t mean I’m superhuman – I still make mistakes. When I do, I always follow up with a brief phone call to my bank to ask them to waive any fees. Guess what? I’ve never been turned down. Your credit card issuer wants to keep your business, so if you ask only occasionally, you’ll probably be successful.

5. Paying foreign transaction fees

I don’t live a life of international travel, but I do have family overseas. When I leave the country, I hate paying foreign credit card transaction fees that are often as high as 3 percent. Fortunately, there now are many cards on the market that don’t have these fees. Capital One has never charged them, while Discover and PenFed have recently announced they’re phasing them out of all cards. Also, Chase has dropped these charges on several of their high-end products that are marketed toward travelers. For more, see Foreign Transaction Costs – and 5 Other Credit Card Pet Peeves.

6. Missing out on a big sign-up bonus

Frugal people like me may not get to rack up hundreds of thousands of miles a year through credit card spending, but we can still enjoy some generous sign-up bonuses from time to time. The key is to refrain from applying for a new card until you’re assured you’re getting the best sign-up bonus you can. Sometimes it is a matter of choosing the right Web link to apply from, while other times it’s just a matter of waiting for the best offers to emerge. For more, see The 5 Best Credit Card Sign-Up Bonuses.

7. Playing the 0-percent game

Many cards offer promotional financing offers of 0 percent on purchases and balance transfers. So what’s the harm in that? Well, for one thing, they encourage you to spend money you may not have. Furthermore, maintaining a large balance will eat up your available credit, hurting your credit score. Finally, even 0-percent balance transfer offers often come with fees of 3 to 5 percent.

Playing the 0-percent game is playing with fire. These offers are so common because the banks know that you’re likely to pay interest in the end.

This post originally appeared at Money Talks News.

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Source: http://feedproxy.google.com/~r/businessinsider/~3/0M9-hTW3AQU/paying-early-and-other-mistakes-credit-card-experts-never-make-2011-11

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The FDIC Fights Back Against BofA's Attempt To Put The Taxpayer On The Hook For Trillions Of Dollars Of Derivatives (BAC)


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Regulators may keep Bank of America from shifting derivatives from its Merrill Lynch unit to its consumer retail division, Bloomberg reports

The Federal Reserve and Federal Deposit Insurance Corporation are discussing whether to allow further transfers between the two units. Bank of America Corp., the holding company of BofA's retail and institutional services units, had moved the derivatives to take advantage of a higher debt rating in its consumer division, which allowed it to post lower collateral levels.

In a 460 page SEC filing made after it reported earnings this October, Bank of America noted that these derivative moves could be limited by regulators, without naming either agency.

"Our ability to substitute or make changes to these agreements to meet counterparties' requests may be subject to certain limitations, including counter party willingness, regulatory limitations on naming [Bank of America NA] as the new counter party, and the type or amount of collateral required," it wrote. "It is possible that such limitations on our ability to substitute or make changes to these agreements, including naming [Bank of America NA] as the new counterparty, could adversely affect our results of operations."

FDIC officials have objected to the move as it increase the potential risk of collapse, forcing the agency to pay depositors. The Fed, however, believes the additional capital requirements would cripple the bank at a difficult time.

Bank of America held nearly $75 trillion in notional derivative contracts in June. The transfers it has already completed have allowed it to avoid nearly $5 billion in collateral postings. A reversal, or additional downgrade, would add to the banks woes. The bank said it could be forced to post an extra $1.7 billion if it was hit by a second incremental downgrade, based of derivatives held on September 30.

Bonus: The complete guide to why everyone's freaking out over Bank of America >

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Source: http://feedproxy.google.com/~r/businessinsider/~3/w9KLuHiONio/fdic-fights-fed-over-trillions-in-bank-of-america-derivatives-2011-11

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Debt Settlement Attorneys ? A Legal Way To Eliminate Debt And Steer clear of Bankruptcy When shoppers in debt take into account enlisting legal help, this is probably a sign that the debt is already too high for them to manage it independently. No matter whether it is that creditors are threatening lawsuits, debt collections [...]

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Many people nowadays are buried in debt and have no way or idea on how to get out of this very bad situation. Debt consolidation loans are financial tools that help you handle your debts better by managing them into a single account.

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