Ten wise ways to make credit cards work for you, plus the new legislation.Like what you hear? Help us out by writing a review at iTunes. Questions go to money@qdnow.com. Thank you!
Money Girl
126 MG Take Charge of Your Credit Cards
Hey, Fidelity. What's it cost to invest with the Fidelity app? Start with as little as $1 with no account fees or trade commissions on US stocks and ETFs. Hmm, that's music to my ears. I can only talk. Investing involves risk, including risk of loss. Zero account fees apply to retail brokerage accounts only. Sell or assessment fee not included. A limited number of ETFs are subject to a transaction-based service fee of $100. See full list at Fidelity.com/commissions. Fidelity brokerage services LLC member NYSE SIPC. This episode is brought to you by AARP. Ten years from today, Lisa Schneider will trade in her office job to become the leader of a pack of dogs. As the owner of her own dog rescue, that is. A second act made possible by the reskilling courses Lisa's taking now with AARP to help make sure her income lives as long as she does. And she can finally run with the big dogs. And the small dogs, who just think they're big dogs. That's why the younger you are, the more you need AARP. Learn more at AARP.org/skills. Hello, and welcome to Money Girls' Quick and Dirty Tips for a richer life. I'm Laura Adams. In this show, I'll offer 10 ways to use credit cards wisely and share some thoughts on the upcoming credit card legislation. If you listened to last week's show, Five Financial Tips for New Graduates, you know that one of my tips was to be very cautious with the use of credit cards. That's because of all the ways people can get themselves into financial trouble. Credit cards tend to be the most common accessory to the crime. On the surface, credit cards seem so flimsy and innocent. Who can imagine their ability to body slam your financial well-being when you least expect it? Not only have credit cards been incredibly easy to get, but their unpaid balances are one of the most expensive types of debt to have. And of course, we all know how easy they are to use. That's a triple whammy that can really work against anyone who lets down their financial guard, even for one shopping trip. But despite all the potential harm that credit cards can inflict, they have a beneficial side too. So I wanted to follow up this week with tips about how to use them wisely and to give you a bit of information regarding recent legislation. The law is called the Credit Card Accountability, Responsibility and Disclosure Act, or Credit Card Act of 2009. The new credit card regulations will be gradually phased in with the earliest starting in August of this year. They're intended to protect consumers from various fees and surprise interest rate hikes on their existing balances, among other sweeping changes. The banking industry opposes the legislation because they fear it will make them less profitable. Many predict that you can expect to say "buh-bye" to a lot of the lucrative benefits, like reward points and cashback bonuses that responsible card users have been enjoying. And it's been suggested that the new rules may result in a tighter credit marketplace where it's more difficult to even get a credit card, especially one with low interest or no annual fees. I'll put a link to the key provisions of credit card reform in the show transcript at moneygirl.quickendertietips.com. Here are 10 tips to make credit cards work for you instead of against you. #1. Send an extra payment or two each month. Sending more than one payment in a billing cycle to your credit card company can really help you stay caught up with your charges and stay on budget. #2. Use float time. This is the exact opposite of tip #1 and is meant for the most disciplined of credit card users only. If you can manage your credit card balance by sending just one payment a month, you are effectively floating your purchases. That means you get to use what you buy before you have to pay for it. You can potentially profit from interest earned on that money during your credit card's grace period. #3. Enter charges in your check register. Once you buy something with a credit card, enter it just as if you wrote a check or used a debit card that forces you to deduct the amount you charged from your available balance and to keep yourself financially honest. #4. Benefit from rewards. If you pay your balance often full each month, you can take advantage of a reward card that will usually come with a higher interest rate. This is the main reason I use credit cards, so I hope the new legislation won't put a complete damper on rewards. H5N1 bird flu is spreading in poultry and cows. It's rare in people, but bird flu can make you sick. If you work with poultry, dairy cows, wild animals, or withdraw unpasteurized milk, wear protective gear like coveralls, NIOSH approved respirators and eye protection, and wash your hands often. If you start feeling sick, seek medical care and tell them you work with animals. Learn how to reduce your risk at cdc.gov/birdflu, a message from CDC. This episode is brought to you by AARP. Ten years from today, Lisa Schneider will trade in her office job to become the leader of a pack of dogs. As the owner of her own dog rescue, that is. A second act made possible by the reskilling courses Lisa's taking now with AARP to help make sure her income lives as long as she does. And she can finally run with the big dogs. And the small dogs, who just think they're big dogs. That's why the younger you are, the more you need AARP. Learn more at AARP.org/skills. My dad works in B2B marketing. He came by my school for career day and said he was a big row as man. Then he told everyone how much he loved calculating his return on ad spend. My friends still laughing at me to this day. Not everyone gets B2B. But with LinkedIn, you'll be able to reach people who do. Get $100 credit on your next ad campaign. Go to linkedin.com/results to claim your credit. That's linkedin.com/results. Terms and conditions apply. Linked in. The place to be. To be. Number five. Protect yourself from problems. If you make a purchase that leaves you dissatisfied, most credit card companies will suspend the charge until the issue gets resolved. If the merchant is at fault, your money can be reversed out of their bank account, so you don't have to pay. Number six. Choose your card wisely. If you do need to carry a balance for a special, large purchase, only charge it to a low interest card. Right now, annual percentage rates that don't exceed 8.99% are generally considered low interest. Find some of the best rates available at bankrate.com. Why pay more interest than you need to? Number seven. Get free card benefits. Even if you don't have a rewards card, some cards offer extra freebies, such as travel insurance and extended product warranties. Be sure to read your card agreement so you'll be familiar with all its benefits. Number eight. Manage your money electronically. Most of the large credit card companies have websites that allow you to download transactions into financial programs, such as Quicken, QuickBooks, and Microsoft Money. That can save loads of time and make it easy to do budget tracking. Number nine. Shield yourself from fraud. A credit card gives you more protection than a debit card if it's stolen. You can only lose a maximum of $50 if unauthorized charges are made to your credit card, but you have unlimited liability for debit card fraud that isn't reported quickly. Get more information about this in Money Girl Show Number 82, which was devoted to the pros and cons of using debit cards. And ten. Watch out for card skimmers. A way that criminals can steal credit card numbers is by using a small, electronic device called a skimmer. Be careful whenever someone takes your card out of view, such as in a restaurant or bar. Skimmers can also be placed over the card slot of ATMs, so never swipe your card in any device that looks suspicious or out of place. Even though the new regulations will strengthen consumer rights when it comes to credit cards, it's still up to you to take charge and use them responsibly and well within your means. A big thank you to Charlie on the Pennsylvania Turnpike, who added Money Girl and several other quick and dirty tips network widgets to his blog at whatsittu.blogspot.com, where too is the number two. I'm glad you're listening. Shaqing. That's all for now. Courtesy of Money Girl, your guide to a richer life. [Music] H5N1 bird flu is spreading in some animals. If you work with poultry, dairy cows, wild animals, or with raw, unpasteurized milk, wear protective gear and take precautions. cdc.gov/birdflu. A message from CDC. With the Wells Fargo Active Cash Credit Card, you can earn unlimited 2% cash rewards on purchases you want and purchases you need. That means you earn 2% cash rewards on what you want, like season tickets to watch your favorite team, and 2% cash rewards on what you need, like paying for parking. That's the beauty of the Active Cash Credit Card. It's ready when you are, with unlimited 2% cash rewards. The Wells Fargo Active Cash Credit Card, that's real life ready. Terms apply. Learn more at wellsfargo.com/activecash. [BLANK_AUDIO]