Cut Credit Card Costs
When 11.75 Percent Is Cheaper Than 5.9 Percent
Beware Tricky Credit Cards
Use Credit Cards Wisely

Cut Credit Card Costs
Here's how to cut those pesky credit card costs:

1. Pay off — or refinance — expensive credit card debt. Even if no new charges — and if only making minimum monthly payments — a $4,500 balance on a 15 APR credit card can take 13 years to pay off. So the $4,500 ends up costing you $9,900!
2. Limit credit card purchases to what you can quickly repay. If you can't pay them off in a month — or two — don't buy them.
3. Teach your kids about plastic. Many don't understand how credit cards work. The result is years of debt — instead of a chance to build their financial futures.
4. Toss all your cards except the one from the credit union. It's a lot less costly than many others. The fewer cards you carry, the less you'll spend. Remember: Your credit report reflects all your available credit. So having lot of cards can hurt you.
5. Forget "teaser" rates. They're introductory only. Within a few months, the rate doubles — or even triples. Some teaser rates only apply to the balance you transfer from another card.
6. Read the fine print to know what you'll really pay. Fees are going up and grace periods shrinking on many cards.

Do all this and watch your costs come down!
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When 11.75 Percent Is Cheaper Than 5.9 Percent
A 5.9 percent credit card sounds good. But is it?

Probably not. For one thing, the 5.9 percent won't last long. It's a teaser rate that will jump up soon after you sign up. Perhaps to 18 percent or more. Another catch: The 5.9 percent may only apply to balances you transfer. Not to new purchases.

You probably can't transfer everything anyway. Suppose you want to switch a $3,000 balance to the 5.9 percent rate. You can — only if the card issuer grants you a credit limit higher than the $3,000. The transfer also can take several months. In the meantime, you continue paying off your old, high-priced card. With less time to enjoy the new, low rate.

The rate is variable. It changes as interest rates change. If the prime rate goes up, you pay more. Don't be fooled. The low rate you hear may be in addition to the prime.

There are other costs, too. They include annual, cash advance and late fees. Miss a payment — and you might pay a higher rate. Or, be fined. Some card issuers even charge if you pay your balance in full each month. Know about all fees before you sign up. Don't necessarily trust verbal information, either — especially from large nationwide card issuers. Have an application mailed to you and then pay attention to all the fees.

Remember: What sounds too good to be true probably is. An unusually low-rate card can cost a fortune. Certainly a lot more than our card. Talk to us today.
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Beware Tricky Credit Cards
The rates on most cards move up and down with the prime or similar index. Introductory, or teaser, rates always head high up soon after you sign up. So 2.9 APR can easily become 17 percent several months later. That's when you'll prefer our credit card. With it, you can quickly pay down balances —— without worrying about rate hikes.

Other nasty problems: Low initial rates usually apply to purchases or balance transfers. Not both. For purchases, you pay the usual high rates.

Also be alert to fees. They're huge if you exceed your credit limit, bounce a payment check — or pay late. Break the rules — and hefty rate increases also may apply. Other big charges apply to cash advances.

Interest calculation methods also can hurt you. The most expensive way to determine interest on your account balance is the two-cycle balance method. Suppose you don't pay your balance in full. With this method — often used with reward cards — interest is based on two months of account activity. Most credit card issuers, including the credit union, use the more consumer-friendly average daily balance.

What about airline and other reward cards? Aside from high interest and fees, there are thresholds to meet before qualifying for rewards. Determine whether you'll charge enough to make the card worthwhile. Also, study restrictions and circumstances by which you might forfeit your rewards.

Be smart! Shop with a member-friendly credit union card.
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Use Credit Cards Wisely
Want a better car? A house someday? Or, an apartment to rent? It's all yours — unless you have too much debt. Especially credit card debt.

• Buy only what you can pay off quickly. If you pay the bill in full each month, you won't even pay interest.
• Make sure the interest rate won't jump. Really low rates — like 2.9 or 5.9 percent — increase dramatically within a few months. Know exactly what you'll pay in the future.
• Use just one card. Ours probably is the cheapest. Don't even sign up for multiple cards. Every time you do, you automatically extend your credit. Even if you don't use all of it, you have it available to you. That alone can discourage creditors from giving you money you really need — like for a car loan.

When used sensibly, credit cards can help. When used carelessly, they can hurt you for years.
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