After the Divorce, Save Money on Credit Cards

    Credit cards are not all alike. How much you pay for the convenience of utilizing one or more credit cards will depending on the issuing bank, your credit score, the card offers you apply for. After a divorce, as you make decisions about establishing credit cards in your own name, finding the best deals can help you save money in fees and interest charges.


ANALYZING A CREDIT CARD OFFER  

]The first step to finding a great credit card deal is to select a card that has no application fee or annual fee. Next, look at the APR (Annual Percentage Rate). The Introductory APR may be much lower than the standard APR, and the account will automatically switch after a pre-determined period. The Introductory APR or standard APR is the interest rate you’ll wind up paying on balances. Credit card issuers charge different interest rates for different types of purchases. For example, you’ll typically pay a higher interest rate for cash advances, and a different rate for balance transfers. Charges can really start to add up.

WATCH OUT FOR LATE-FEES, OTHER CHARGES  

Just one late or skipped payment can result in your credit card’s APR changing to a “default APR” rate, which could be upward of 29.99 percent or higher. Credit card issuers also heavily penalize consumers in the form of flat-fee charges for late payments (up to $39 or more), or if you go over your credit limit (which could result in an additional $39 or more fee). If you’re traveling overseas and attempt to use your credit card, be prepared to pay a three percent currency exchange fee on each purchase.  


CREDIT CARDS THAT OFFER REWARDS

Beware of credit cards that offer rewards. These credit cards often have higher annual fees and interest rates. Thus, if you wind up maintaining a balance, the money you pay in fees and interest can quickly become much greater than the value of the reward. The best way to benefit from using a major credit card with is to pay off your balance monthly. Avoid late fees and over-credit-limit fees. Otherwise, at the end of a given year, you’ll probably figure out that even if you received one free airline ticket, you could have purchased several round-trip airline tickets with the money you threw away. Also, based on how rewards are issued for a specific credit card, make sure your spending habits will allow you to benefit from the reward offered. Figure out the value of the reward. If you only charge $10,000 per year on a card, but to earn a free airline ticket, you need to spend $25,000 per year, that offer may be of little use. Airline frequent flier miles often expire after 12 months.