Make Your Credit Card Work for YouChoose the Right Card with the Right Terms and the Right Rewards for Maximum BenefitsNovember 2011Does your mailbox overflow with credit card offers? Before you shred the next batch, take a look and see what the credit card companies are offering these days. You might find a deal that’s better than the one you already have. Companies offer everything from airline miles, to groceries, to electronics as incentives for using their particular credit card, say personal financial planning experts at the Pennsylvania Institute of Certified Public Accountants (PICPA). Find the card and benefits that are right for you, and you can rack up some really nice rewards. A few tips for success: 1. Find the perfect card. So which card is going to be “your” card? Do you want to collect airline miles for a trip? Do you want to receive rewards from a particular store or vendor? Maybe you want cash back on each purchase instead? Fortunately, there are many choices out there, and with a little research you can find a card that suits your needs. 2. Compare offers. Don’t jump to sign up for the first offer that looks good. Be sure to read the fine print. Interest rates, annual fees, payment terms, and reward redemption will vary widely from company to company. Know what you’re getting. 3. Skinny down your wallet. Once you’ve added a new card consider closing older accounts. Closing accounts that have higher fees or interest rates can save money. However, there can be drawbacks to closing established credit card accounts. Understand the potential impact on your credit score before you close down old accounts that have a good history. 4. Access to low-interest funds. If you need ready access to cash, many credit card companies offer no interest, or very low interest rates for a certain length of time on cash advances. Carefully check the terms on your card, but don’t overlook this option for accessing funds when you need them. 5. Fringe benefits. Many credit cards come with extra benefits most people don’t use or even know about. Some offer additional car or accident insurance when you travel. Others provide an extended warranty on certain purchases. Know the details so you can take full advantage. 6. Don’t forget to redeem. As you start piling up points, don’t forget to use them. Some rewards will have an expiration date on them. Don’t lose out on the very benefits you signed up for in the first place. Smart Money While you’re enjoying the benefits and rewards of your credit card, be sure to heed these additional tips: • Avoid unnecessary fees. Make sure you know about and understand any late payment or over-the-limit fees. You may also incur fees for cash advances and balance transfers. Some companies may even charge a fee if you pay by phone or online. Know the terms of your card and plan accordingly. Shop Around, Reap the Rewards A lot has been written about the perils of credit cards and the debt people can amass by using them. But credit cards can also provide some excellent benefits that can help you achieve your goals, whether that’s travel or a little cash back in your pocket at the end of the month. A CPA can help you compare credit cards and determine which might be the best for your budget and financial lifestyle. To find a CPA by location or area of expertise, visit www.IneedaCPA.org. The Pennsylvania Institute of Certified Public Accountants is a professional association of more than 20,000 CPAs who work in public accounting, industry, government, and education. Founded in 1897, PICPA is the second-oldest state CPA organization in the United States. To find a member CPA in your area, visit our Web site at www.picpa.org and click on CPA Locator. LAST UPDATED 11/11/2011
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