by: Jeremy Zongker

The following tips are basic principles about obtaining and using credit cards that can save you some serious cash and keep you out of debt.

10. Have at Least One Credit Card for Emergencies – While we highly recommend having a rainy day fund for emergencies rather than relying strictly on credit cards, having a credit card with a low interest rate “just in case” is a good idea.

9. Rewards are not so Rewarding – Rewards can be a good thing, but only if used correctly. Rewards cards typically have a higher interest rate than regular credit cards, with the value of the rewards justifying the extra expense. The rewards are not usually as valuable as you may think. Typically the value of the reward is around 1 cent per dollar charged and often the rewards expire at the end of the year if you don’t use them. If you pay off your balance in full each month and charge a lot they can be worth while, otherwise you’re better off with a non-rewards card.

8. Have Two Credit Cards – If you do plan to take advantage of rewards, we recommend you carry two credit cards. The rewards card for making your daily expenses that you will pay off in full each month and a second card with the lowest possible interest rate to cover any emergency expenses when you won’t be able to pay off the balance in full by the end of the month.

7. Shop Around – Don’t apply for the first “pre-approved” offer you receive in the mail or any for that matter. Do the research for yourself. There are plenty of sites such as CreditorWeb.com that allow you to compare hundreds of credit card offers with a simple search. You’ll get the best deal by shopping around.

6. Read the Terms – The terms and conditions are the equivalent of the disclaimer you hear on car lot commercials. It cuts through the hype and reveals the true terms of the credit card such as what happens when you miss a payment and what you’re really getting from the rewards. Most terms are not that long, usually around one full page, it’s worth your time to read them.

5. Ask for a Better Rate – Once you have been a credit card customer for a few months call them and ask for a better rate. They won’t laugh at you, they get hundreds of these calls every day and if you’ve been a good customer it usually will work. Credit card companies work hard to obtain you as a customer and they will work hard to retain you.

4. Pay Off Full Balance Every Month – All credit cards have high interest rates compared to other types of loans. You should never plan to carry a balance on a credit card. If you must make a large purchase that you do not have the money for at the time, obtain a loan or a revolving line of credit from your bank. You will save a bundle on interest rates.

3. Work with Retention Department – If you ever feel you are being treated unjustly by your credit card issuer, a simple threat to leave will get you transferred to the retention department. This department will be MUCH more helpful to you and will usually do whatever it takes within reason to get you to stay.

2. Do not get a Cash Advance – This is the second worse thing you can do with a credit card, short of missing a payment is getting a cash advance. The cash advances usually come with a very high interest rate. What makes it worse is the fact that with most companies this higher rate credit will not get paid off first, or even in the order that you took it out. They will apply your payments towards all the lower rate purchases and will only begin paying off your high interest cash advance will all other items on that credit card have been paid off.

1. Never, EVER Miss a Payment – This is the absolute worse thing you can do with a credit card. Not only will you incur a late fee, but your interest rate will also skyrocket. In addition it will be a negative blemish on your credit report which can cause the rate on any other loans or credit cards you have to increase as well as insurance rates. It also makes you less likely to get approved for future credit.