Tips for Dealing with Credit Cards

Pre-Approved Credit Cards are not actually pre-approved. It just means you have cleared the first step in the approval process. At one time, pre-approval meant just that. Once you were told that you were pre-approved the credit card issuer had to give you a firm offer of credit. So unless you went bankrupt or some other major change occurred before you responded, they were obligated to give you the card. Today, after a new law, credit card companies can put further qualifications on you that must be met before they will issue the card. After you respond to the offer they will run additional screening on you.

Many of us fall into debt these days. Credit cards often help us in this problem, as it doesn't really feel like we are spending money. Interest charges add up rather quickly and debt can get out of hand in a very short time. Debt consolidation is one strategy to get yourself out of debt. This consolidates all your debts into a single, lower-interest loan. Finding this lower-interest loan can be a challenge and qualifying can prove difficult if you have significant debt.

Today you have many options, more than you are probably aware of. Traditional consolidation loans from a bank or other financial institutions are one way. You may want to think about using a home equity loan or a loan from an insurance plan or retirement plan. You can even take a loan from a kind relative. Using a credit card is another option to consolidating debt. These options for consolidating have the potential to be very helpful or very hurtful to you. Be sure to do your research and have a good plan. When you consolidate you should have a plan to have you out of debt in about 5 years. You also want to have a plan to stop adding to your debt — plan to be debt free in the future. You will want to seek much advice as you begin this process — from a professional, a friend who is wise with your own finances or even a family member. It is often hard to admit to debt problems, but often you need help to get out from under the quickly accumulating debt you are in.

As you search for the best credit card for you, one important thing to consider is the APR. The lowest APR is going to be the best for you — especially if you are used to carrying a balance, which of course we don't recommend you do regularly. Credit card issuers want our business and will work hard to get it. Often they will do what they can to get you and to keep you. You can often get a lower APR by simply asking. You want to be a good customer — each institution has a way to rate you as a customer, the higher the score the better. To keep your score high, pay on time. Stay within your credit limit. Use your card at least occasionally. You need not carry a balance but an active account is crucial.

Bargaining for a lower APR can be simple. Tell them you are planning on switching to another card that offers a lower APR — there is always a lower APR out there. They will have a department devoted to keeping customers — you want to have them transfer your call there. This department will have the power to lower your APR to keep you. Assuming you are a good customer to them, you should be able to get them on the phone, then you will need to use your negotiating skills. Be firm. In addition to maintaining good credit card practices, this phone call can help you obtain the lowest APR available. As always, remember that APR isn't the only number to be concerned about, but is sure is weighty.

Divorce is a very difficult time in one's life. Having your credit card add to those problems can be avoided. If you are separated and planning on divorcing, you will want to separate your credit card accounts as soon as you see appropriate. Handling credit cards while divorcing can be tricky, but it doesn't have to be. During the proceedings, responsibility for specific balances will be doled out, but if they have been separated early this will be much easier. As far as the credit card issuer is concerned, you both agreed to pay the balance, but it will be easier for you if this is delineated early on. Call you creditors and cancel joint accounts. Simply explain the situation, close the joint account and open an account in your name only. If you get resistance from the person on the phone ask for a manager until you get someone who will help you. Note their name, the date and time of call. Record the new account information so you have it on hand until the card arrives.

Your credit history can stay with you for quite some time. Even if you have paid off an account, it will remain on your credit history for seven years. If you had late payments that were recorded with the credit bureau they will be noted. Removing late payments is not likely, but if you have paid the account off that will be noted and to your advantage. This should show a zero credit balance on your report. The further in the past these late payments are the better for your current credit. If a lender refuses you for this, seek another and be ready to explain the past. From now on, pay on time. Positive information can stay on your credit history forever! So act positively.

Deducting the interest from your credit card is possible. If you use your credit card for legitimate business purposes you may be able to deduct the interest. You may also be able to deduct the annual fee. Consult your tax accountant for details. And remember, do not get carried away by this perk. Deducting the interest does not mean it doesn't cost you to accrue the interest. It does, however, effectively cut the cost of the interest rate. You will still want to choose the lowest APR available to you. If you have to choose between charging a non-deductible interest expense, your son's orthodontic work, and a deductible interest expense, your new office furniture, the deductible expense will win out. As always, be wise in the way you use your credit cards.