Playing The Credit Card Game

“Credit Card” and “Game” are words that are rarely spoken together. Games are fun and exciting, while credit card debt is anything but. According to financial expert David Bach, credit cards are the biggest game of all, and just like any game, there are certain rules that all credit card companies are held to.

Knowing the Rules

Because as consumers, we are in the game already, Bach says it is imperative that we know and understand the rules of the game we are playing.

Interest rates. This is the percent that consumers pay in order to borrow money from the credit card company. It is important to know this number, because it represents what your debt is costing you. The higher the number, the more money you are throwing away each month.

Late fees. Credit card companies are allowed to charge anywhere from $15-$39 on payments made even one hour late. This is money that could be applied to your debt. Pay your bills on time, and ask for an extension if you know you may be late with a payment. After the fact, you can call your credit card company and ask for late fees to be waived.

Read the Fine Print. Often credit card companies lure you in with promises of low interest rates, or no fees on balance transfers. These “teaser” rates are for a limited time, so it’s important to understand your agreement, and know how long you have to pay off your debt at the low rate. It is also important to understand the terms of your agreement, often a late payment will negate the teaser rate, and leave you vulnerable to fees, penalties, and interest rate increases.

Playing the Game:

Now that you know the rules of your credit card, you are ready to really play the game.

Know what you owe. Begin by making a complete list of all your credit cards, the amount you owe, and the interest rate the card carries. Prioritize the list starting with the cards with the highest interest rate.

Contact your creditors. Call each credit card company and negotiate a lower interest rate on your existing debt. Although they may argue at first, a supervisor is authorized to reduce your rate, immediately saving you money as you pay down your debt.

Don’t be afraid to walk away. If they refuse to work with you, find a company offering a no balance transfer fee, and 0% interest for as long as possible. Transfer your debt to the new card, and pay it off within the allotted time period. Continue to pay down your debt, and celebrate each victory along the way, as you work to win the big game.