How to be a careful consumer

“A careful consumer looks closely at the cost of carrying a credit card,” says Suzanne Boas, president of CredAbilitye.

Buy! Spend! Lease! Charge! Refinance! Consolidate! Consumers are bombarded with financial messages, in newspapers and magazines, blaring from broadcasts, popping up on computers. And, the most important messages may be in very small type. “But,” Boas says, “it is a very good idea to read that small type, especially in credit card agreements, to save yourself unnecessary costs.”

CredAbility offers these ten tips to save on credit:

1. Pay your bills on time. Not only will you avoid late fees and high interest rates, but paying on time is the most important factor in determining your credit scores, which determine the availability and cost of future credit.
   
2. Always pay more than the minimum due. Optimally, pay off all charges every month. If you can't do that, try to pay off your bills as quickly as possible. The longer you take to pay down the balance, the more money you pay in interest. Paying the minimum could mean taking 10 years or more to pay off your balance.
   
3. Pay off high interest cards first. This doesn't mean ignoring the other bills. If you have many cards to pay off, pay the minimum on all except the one with the highest interest rate. Pay as much as you possibly can on that one. This “laddering” technique reduces the overall interest you pay.
   
4. Transfer balances to lower interest cards. But, beware of low introductory transfer rates—they may skyrocket if not paid off over a short term.
   
5. Negotiate with your creditors. If you receive a late fee and have a good payment history, ask the credit issuer to waive the fee. If your interest rate seems high, ask them to match or beat the rate. If they won't work with you, it may be time to look for a better credit card deal.
   
6. Shop around for the best deal. Don't just accept whatever pre-approved cards arrive in your mailbox. If you have excellent credit, look for the lowest rate as well as for cash-back rebates, frequent-flier miles, free gasoline, or donations to college savings plans. If you have spotty credit, find cards that have the lowest costs. Watch out for monthly and annual fees, application fees, processing fees, and excessively high interest rates. Even secured cards have varying costs. Compare the many offers on websites such as Bankrate.com and Cardweb.com.
   
7. Check the fine print. What are the late fees and over-the-limit fees? What is the grace period? Is the interest rate variable or fixed? Most importantly, read the slips that come with your bills. Issuers can usually change the terms with a 15-day notice.
   
8. Read your bills thoroughly each month. Watch out for overcharges, phony charges or billing mistakes. You have 60 days to dispute these items, but after that, you're out of luck.
   
9. Close zero balance accounts. If you have accounts you don't use, close them. This will improve your credit score. Most people don't need more than 2-3 cards, and extra cards can only help you dig deeper into debt.
   
10. Beware of the extras. Credit Insurance may be more expensive than life or disability insurance, and benefits the lender as well as the cardholder. Most people won't need it. Debt suspension and credit protection programs offer no value to consumers.
    

• Equifax 800-685-1111
  
• Experian 888-EXPERIAN
  
• TransUnion 800-888-4213