Credit Card Tricks | Credit Card Debt Relief Secrets

The "Envelope System" 2

When you receive balance transfer checks either use them or store them away. Don't toss them out! Even after they've expired you can still call and ask for extension. If you've been a good customer (carrying a large balance from month to month and making your payments religiously) the odds are 50-50 that they'll give in and make an exception for you.

Avoid making a low rate transfer into a credit card that has a higher interest rate. The higher rate debt is buried at the bottom of the stack so it's paid off last. Any and all payments are credited exclusively against the lower interest rate debt. Now the magic of compounding interest is working against you, not for you. The best tactic is to transfer balances into new virgin cards.

Be VERY sure that the credit limit on a card is sufficient to allow the balance transfer you want BEFORE you initiate the thing. Some cards will allow the transfer but kill the introductory rate and replace it with a sky-high number. They may also charge you a fee for raising your credit limit.

Or they may decline the whole thing and place a black mark on your credit record. Either is a disaster so check that credit limit carefully. If you're a few hundred short, call and ask for an increase. Write down the name of the representative you talked to in case they screw things up later.

When doing a balance transfer over the phone, if there's a transaction fee of some sort ask that it be waived. Most customer service operators are empowered to drop the charge - if asked. So ask - exactly what have you got to lose by asking?

Christmas offers can be dangerous. Many credit card issuers send out checks right around December 15. They know everyone is running a little low on cash and could use a few extra bucks.

Many of these check offers don't even mention the interest rate! They might say something like "here are some low interest rate checks to help you with your holiday shopping".

Buried in the tiny print is reveals the actual interest rate-24.99%! Always fully understand the terms before you jump. Don't let the need of the moment land you in deep debt.

The offer says "Six months introductory period - at ZERO PERCENT INTEREST!" Wow, you think - this is great! I've got to jump on this. You flip over the sheet and there it is in big print - APR interest rate = 0%. The hidden costs are the whopping transaction charges which are stated as percentages with no ceilings. These inflated charges can easily equal or even exceed the usual interest rate costs.

Be careful to avoid attempting to transfer balances within the same corporation. If you attempt to transfer a balance between a gold credit card and a platinum card with the same issuer - you'll have problems. (Starting with the transaction being aborted)

If you're making a payment with a balance transfer check at a much lower interest rate - mail the thing off as soon as possible. It's in your interest to lower the interest rate charges as quickly as possible.

Keep track of introductory rate period expirations. You can bet your left arm that the issuer won't mention it. They hope the date (and the interest increase) will slide past completely unnoticed. Make up a list and record each transfer and to the right, put the date of expiration.

If you plan to pay off the total balance on a card, call the customer service people and tell them of your plans. Get the exact amount of a payoff for a certain date. Ten days is a good choice as it gives you ample time to get your check to them. Don't be surprised if they then make you some sort of "special" offer in an effort to keep your business.

This tactic can reduce your debt more than you might suspect. If you can and if you are organized enough to make sure all payments are made on time, call customer service and ask if you can make payments every two weeks. Then ask for their mailing address and stamp and address some envelopes in preparation.

You might also discuss your plans with your local banker. They may be able to set up an automatic payment plan so the issuer gets their money from your checking account every two weeks regular as clockwork. This makes it effortless for you, reduces your paperwork, pays off your debt more quickly and helps build a solid credit history.

Don't be surprised if a card you paid off offers to send you a new card (or just sends you one automatically). If you don't need it, chop it up and discard it. But keep an eye out. They will often follow-up with yet another offer at a more attractive rate. They want you back and are willing to make it worth your while.

If a customer service rep offers you a special deal, you should know that what they're offering is probably their highest interest rate deal. Tell them their offer is nice but you've had better ones and see what they do. "You'll have to do better than that!" would work also. Chances are excellent they'll find another more attractive deal. Most phone reps have several different offers in their bag (or computer).

If your issuer is unwilling to quote you a new lower rate, ask if they have any new cards they're offering. You can be sure they very much want to get a second card into an established customer's hands. It's much cheaper for them than going out and finding an entirely new customer.