Depending on your situation you may want to use an existing credit card to handle your monthly expenses or you may want to get yourselfa new card. The most important factor in this decision is the interest rate. If your current card has a high interest rate, don’t use it. If it has a low rate you might as well keep it.
Also, make sure that your credit card spending limit is enough to pay for your monthly expenses, including your regular monthly mortgage payment.
No matter what, whichever card you use needs to have a zero balance when you start and you need to pay off the balance every month. If you do not pay the entire balance, you will end up wasting your hard earned money and this strategy won’t work for you.
Further on in the report I’ll show you how you will pay your credit card balance in full every month.
If you start shopping around for a new credit card you have to consider several important questions before you apply.
What is the interest rate and billing cycle? The billing cycle may not coincide exactly with when your bills are due or when you send the payment to cycle your mortgage. If there is a mismatch, you could be charged interest. Be sure and draw up a timeline related to all monthly bill due dates and incorporate them into an efficient cycle.
How is the interest calculated? Some credit cards will accrue interest based on your daily balance, which means that you may be charged interest just for using the card at all. Be sure to read the fine print CAREFULLY along with any new terms and conditions sentto you by the credit card company. You don’t want to use a card that calculates the interest in this manner.
Do you have any grace period? You should have at least a 30-day grace period and you should find the lowest interest rate you can.
Also find out if there is an annual fee. If there is, pick a different card. That’s an extra expense you don’t need!
Do you get any bonuses? Some cards allow you to acquire air miles or cash back, which can be a great incentive. Also, make sure and go with a reputable bank (obvious).
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