Annual Audit of Your Credit Cards

by Susanna Hamilton, Contributing Editor on November 17, 2011

Credit Cards
Since the holiday season is quickly bearing down upon us, it may be a good time to perform an annual audit of your credit cards. Auditing your credit cards means checking your interest rates, late payment fees, over-limit fees and your reward points. Performing this type of audit on an annual basis can help consumers make sure they have the best possible credit cards for their individual needs.

Interest Rate Check-Up:

Review each of your open credit card accounts and double check your interest rates. Sometimes the banks raise them one or two percent. Unless you sit down and compare your statements.. you may not realize you are actually paying more interest than you were a few months ago.

This could be a good time of year to explore the potential of transferring your higher interest balances to a card with a 0% introductory interest rate. There are several balance transfer credit cards offering a 0% introductory rate for as long as 12 months, 15 months and even 21 months.

Credit Card Rewards and Cash Back:

Since credit card issuers are always interested in attracting new customers, this could also be a great time to switch to a card which offers a better credit card rewards program in the form of points, airline miles or cash back.. whichever will best serve your needs.  Remember, not all reward programs are created equally, so be sure to compare the offers and consider which credit card offers the rewards you feel would best suit your lifestyle.

Carefully review all of the information available about your existing reward credit card programs before you make any decision about changing cards. Check for any restrictions that may be placed on when and how the rewards may be used.. limitations that may be set on rewards.. maximum rewards in any given period.. and whether the rewards have an expiration. These are all important factors to consider.

Remember, the rewards and cash back credit card programs are based on money that you have spent using your credit card. If you are earning air miles rewards, but you fly only infrequently, the rewards are not very useful to you. It may be wiser to find a reward credit card that provides cash back and/or points which may be applied towards other things in addition to travel.

Retail Credit Cards:

Remember to review any revolving credit card accounts you may have with individual stores. In most cases these cards carry higher interest rates than bank credit cards. Additionally, these cards can only be used in specific stores, making them far less valuable than bank cards, which can be used nearly everywhere.

Auditing all of your credit cards on an annual basis makes good financial sense. Since most of us are likely to use our credit cards during the upcoming holiday season, this is an excellent time to sit down and determine which credit cards you have (or may wish to apply for) that offer you the best possible interest rates as well as the best rewards for using your cards.


Article Courtesy of Credit Card Approval Center

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