10 credit card management tips

If you've given your credit cards a workout, here are 10 ways to cool down your spending.

1. Read the fine print on your statement. "Very few of us do it, and very few of us understand it anyway," says Chris Farrell, host of the nationally syndicated television show "Right on the Money!" and author of Right on the Money: Taking Control of Your Personal Finances.

But those bill stuffers are where your credit card company will inform you that the rate is going up or the payment date is changing. Farrell remembers one woman who e-mailed "Right on the Money" after getting hit with her first-ever late fee. It turned out that her credit card company had notified her -- in small print -- that the payment cycle was changing and her bill would be due several days earlier.

If you are applying for a new card, you want to be extra careful to understand all the rules and regulations before you use it the first time, says Chris Bender, communications manager for the National Foundation for Credit Counseling.

2. Verify all charges. Are the charges really yours and are they correct? Bender advises consumers to save their credit receipts. When your statement comes in, match the receipts to the statement and check for two things: did you make the purchase and is the amount correct? If you notice some bad habits -- spending a little too much in the boutiques or electronics stores -- it's also a good time to review your financial limits.

3. Ask questions. If there is anything on your bill you don't understand, whether it's a new fee, a charge you don't remember making or finance charges, call the company and ask them to explain it.

4. Know your limits. Remember when credit card companies would decline your card if you were over the limit? Now many companies will accept the charge and tack on a monthly fee for being above your limit.

Over-limit fees can run up to $35, according to Bankrate.com research. It's an unnecessary expense. Find out in advance what your credit limits are and stay well under them.

On the other end of the credit spectrum, if your credit is good and you normally carry a balance, your card company might increase your limit to encourage you to carry a higher balance, says Farrell. "It's seductive to the consumer."

5. Don't be late. "Paying late is probably right up there with the worst things you can do," says Linda Sherry, editorial director with Consumer Action, a nonprofit advocacy and education group based in San Francisco. Late fees also can reach $35. And the penalty rate, which card companies can invoke after just one late check, ranges from 12.95 percent to 26.49 percent, according to Consumer Action's survey.

So what is late, anyway? Credit companies generally want to process your payment by the date it is due. Some companies will even mark a payment late if it's processed after a specific time on the day it's due, says Jean Ann Fox, director of consumer protection for the Consumer Federation of America, an association of almost 300 advocacy and education organizations.

Think ahead. Normally, mailing a bill 10 days ahead of the due date is plenty of time, but allow two weeks during the holiday season, says Lynne Strang, spokeswoman for the American Financial Services Association, a Washington, D.C.-based industry trade group.

Some consumers don't like the pressure of playing "Beat the Clock," so they've turned to electronic or online bill paying. But you have to be careful. Keep your Internet security current, and type in the correct Web address. Internet scamsters are making money with sites that look very similar to big banks but have Web addresses that are just one typo different, says Fox.

And make sure that the electronic bill paying service you use for your cards is really instantaneous. Some sites simply reprint your information and put a check in the mail to your creditors, she says.

If a bill is late and you are hit with a fee or rate hike, you do have some recourse. If you realize a payment is going to be late, call the company in advance. If you're pleasant, and not habitually tardy, it's possible they will agree to forgive the penalty. And be persistent. It may take a couple of "no ways!" before you find someone who says, "Why not?"

6. Don't take a cash advance. Sure, it looks tempting, especially when money is a little tight. But cash advances often carry a higher interest rate than the rest of your balance in addition to special one-time cash advance fees.

Short answer to the cash advance question: Don't. With the fees, finance charges and higher interest rates, you're better off charging what you need.

If you're in an emergency situation, ask how much your company charges for a cash advance and what steps you have to take to pay it back.

7. Be smart with balance transfers. Don't switch your balance to a card with a lower rate before asking a lot of questions. While the idea is technically sound, you have to tread carefully to pull it off.

Is the low rate permanent or temporary? If you have to switch cards every three to six months, the damage you're doing to your credit might be far more expensive that the few dollars you may save.

Will the card accept the balance amount you'll be transferring? Some card companies frown on anything more than $4,000, says Sherry.

Will the transfer be treated as a normal balance or a cash advance? Mark Oleson, director of the Financial Counseling Clinic at Iowa State University, warns that many times the "checks" that credit card companies send to facilitate balance transfers are instead treated as cash advances, complete with extra fees and higher APRs.

In addition, Oleson says, many card companies charge a balance transfer fee of 3 percent to 5 percent of the balance, though some will cap it at a set amount.

Always call the company and go over the transfer procedure step by step. Get their transfer policies and procedures in writing. Find out if you get a lower rate by using one method of transfer over another and what fees, if any, will apply. And if the transaction is treated as a cash advance, stay away.

8. Pay more than the minimum. A study by the Consumer Federation of America calculated that if you carry a $3,000 balance on a card with a 19.8 percent interest rate and make a minimum payment of 2 percent or $15 (whichever is greater), it will take you 39 years to pay off the card. In addition, you will have paid $10,000 in interest. Think about that the next time you decide to put your holiday presents on plastic.

9. Plan around your credit-use patterns. If you carry a balance, trading an annual fee for a lower rate might actually save some money. But if you pay your bill off every month, the interest rate won't matter quite as much. Get a card that best fits your financial lifestyle.

10. Shop around. Is one card raising your rate? Hitting you with too many incidental fees? Changing the rules on you? Get all the information you need to move your business to another card, then call your current credit card company and ask for a better deal. The real secret of shopping around? Be willing to walk.

Dana Dratch is a freelance writer based in Atlanta.