8 Tips to wisely handle credit card debt in 2012

2011 is past now! The happy bells of 2012 have already started ringing. However, are you thinking of adding a new and glittering credit card to your arsenal this 2012? Below are 10 tips for obtaining a brand new credit card this year and not mishandling it.

1. Know the earth below your feet: Like most folks, you may not know that the interest rate and credit limit you get completely depends on your credit history. Request a free copy of your credit report from AnnualCreditReport.com and check your account history. If there are more negative markings (such as late payments, short credit history or huge utilization) in your credit report, then it’s likely that you’ll not get the best rates.
2. Look for the benefits you want: If you already have a bunch of those in your wallet, then why should you approach for another? Actually, there are obvious reasons behind. If you are looking for more cards, then you should first figure out what type of benefits you seek. If you travel often, then consider those cards that provide you with reward points whenever you fly or stay in hotels. Apart from this, there are gas reward cards, cash-back reward cards, cards with low or no balance transfer fees and cards with low penalty and fees.
3. Compare and contrast: Find out which cards charge an annual fee. See if the rewards cover their annual fees. Would you accept few benefits if the card has no fee? Moreover, consider the APR on the card. It’s not necessary that the card with the lowest APR is the most suitable option for you. You should also take into account the penalty and late fees, especially if you are known for miss payments. Lastly, make sure you look at other fees like the balance transfer fees or foreign transaction fees, which could turn the card less favorable.
4. Check out for other perks: Credit cards often come with perks other than just their reward programs. Below are few benefits you should consider. •Roadside assistance: Some cards will come to rescue you if you are stranded on a dark desert highway. However, there may be some geographical restraints. •Travel assistance: Often some credit cards befit you with medical care or legal protection if you are traveling abroad. •Purchase protection: Some cards provide you return in case a retailer doesn’t take back a fresh purchase made.
5. Cards for people with blemished or no credit: If your credit is blemished or you have almost no credit, then you got two options. Either apply for a secured card or become an authorized user on someone’s (your spouse’s) card. However, if you want to take out a secured credit card, then you need to deposit at least $500 as collateral in order to activate it.
6. Rejected? Dig out the reason: According to the new federal rule that came into effect last July, creditors are required to reveal the credit score used to make a lending decision. If you have been rejected or given unfavorable terms by the lender, then the lender is liable to provide you with a notice that lists your credit score, at least 5 key factors that hurt your score, the date the credit score was created and the credit reporting agency that provided it. If you have these data, then you can easily figure out the best possible ways to raise your credit score and apply again within the next few months.
7. Create a good record of accomplishment: It’s really pleasing to just pay the minimum each month on your cards, but this will just swell the amount you owe. So pay more than the minimum if you are comfortable with. If you are forgetful about your payments, then you can even set up an automatic payment plan. You might not know but if you go on making your payments on time, then it’ll in a way boost your credit score.
8. Know the credit card laws: Two huge acts cover credit card practices and billing: The Credit Accountability, Responsibility and Disclosure Act (CARD) and the Fair Credit Billing Act. The CARD Act eradicated several doubtful and abusive credit card practices such as retroactive rate increases, double-cycle billing and applying payment to lower-rate balances first. However, the Fair Credit Billing Act summarizes your rights as a cardholder whenever you face a billing dispute with your creditor.