The Skinny On Credit Cards: How to Master the Credit Card Game

The Skinny On Credit Cards: How to Master the Credit Card Game, Jim Randel, Rand MediaCo, 2009

Here is a simple, but not simplistic, look at the world of credit cards.

Beth and Billy are your average married couple who suddenly find themselves with a lot of credit card debt. Billy feels that as long as he pays the minimum payment each month, everything is fine, but Beth is not so sure. Along comes Randel, the author, to explain to them the reality behind credit cards.

Credit card companies want cardholders to pay just the minimum payment each month. That way, they can charge interest on the unpaid balance, raising your overall bill. If that particular ard was never used again, it can take years to pay your total bill by paying just the minimum amount. You will also pay the credit card company more than you originally owe, because of the accumulated interest on the unpaid balance.

Credit card companies can, and will, raise your APR (Annual percentage Rate) whenever they want; the Cardholder Agreement says so. They can also be very sneaky about setting the cut-off time for receiving payments. For instance, they can set the cut-off time for 10 AM, when they receive their daily mail delivery at noon. Even if your payment was received that day, it is still late, which means that they can charge a late fee. College students are a goldmine, because they are probably financially illiterate, and think of credit cards as free money.

What can the average consumer do about it? Pay off as much of your bill each month as possible; forget about paying just the minimum payment. Call your credit card company, and ask them for a lower interest. It could shave months, or years, off the time needed to eliminate your debt. If you have a large debt, look for a one-time infusion of cash to reduce the debt. Consider a low-interest credit card as a place to which to transfer your balances.

This book does a wonderful job at teaching the financial literacy not taught in school. get past the stick figure illustrations, and this book is highly recommended for everyone.