Four Credit Card Secrets

You have probably heard credit card advice like "look for the lowest interest rate," and "try to avoid cards with annual fees." Those common sense tips won't be covered in this article. This is about the credit card secrets you may not have heard. Here are four of them.

1. Get rid of annual fees. What if your cards have annual fees? Can you keep the cards and get rid of the fees? You sure can. Most credit card companies don't want to lose your business. If you have been making the payments on your cards on time, just call and say you want to cancel your account.

Your call will be immediately handed over to an account manager or "customer specialist" who will ask you why you are canceling your account. Explain that you have decide to keep only those credit cards that don't have annual fees. At this point they should offer to drop the fees if you keep the card. This worked on three out of four cards I called on, and I just went ahead and canceled the other.

2. Watch out for changing due dates on your statements. It isn't enough to get you for fees and interest. Some credit card companies are now purposely changing the due dates on your credit card statements so you'll accidentally pay late.

Of course, this lets them collect a hefty late fee, but that's not all. They'll also be able to raise your interest rate, and even raise the rate on other cards you may have (see number three below). Bottom line? Check the statement - your payment due date may not always be the same.

3. Watch out for universal default rules. Read that fine print. Under "universal default" rules, if you are late on one card, or if you go over your limit, your interest rate can be increased on other cards as well. They love to get you with this one. Default interest rates can be 10% higher than the normal rate, which means you could pay an extra $400 per year on $4,000 in credit card debt.

4. Reduce credit card debt fast by paying only the minimums on most cards. Suppose you can budget $200 monthly to pay down your credit card debt. The best way? Pay the minimum on all cards but the one with the highest interest rate, and put all the rest of the money towards that one.

For example, if you have four cards, and the minimum payments are $25, $30, and $45 on the lower interest ones, pay just those minimums, and then apply the other $100 to the high-interest card. Once it is paid off, keep applying that $200 to the debts, again paying only the minimums on all but the highest-interest-rate card. This is the fastest way to eliminate your debt, making it perhaps the most important of these credit card secrets.