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WINNING THE CREDIT-CARD GAME

Some banks are eliminating the standard 25 or 30-day grace period within

which you may pay your bill within being charged interest. This is the normal

grace period before interest kicks in. But this is slowly changing. For

example, some banks are offering extremely low fixed rates, but without a

grace period. These cards will charge you interest from the date it processes

your charge slip.

If you usally pay your bills in full within the normal grace period, it is

best you avoid no-grace-period cards. The 25 or 30-day garce period is more

financially significant for you than a lower interest rate. However, if you

carry a balance each month, you're better off with a lower interest rate. In

this case, a lower interest rate can save you more money than a grace period

would.

Most banks and thrifts charge interest from the day they process your charge

slip when you use your card to get cash. In addition to this, some cards are

now assessing cash advanced service charges based on a percentage of the

amount received. It used to be that service charges were based on a fixed

fee, regardless of the amount of transaction.

If you avoid interest charges by paying off your bill each month, seek out

a card that offer very low interest rates plus a grace period on purchases.

Some institutions periodically offer cards with no fee for the first year as

a promotion.

Don't be lulled into getting "premium" credit cards such as "goldcards" and

Premier VISA. The only significant premium with these cards is the extra

amount you pay in higher annual service fees. Besides the fancy finish of

the card, the only other benefits you get with premium cards are travel

insurance and the extra protection if your card is lost or stolen. Since by

law, you are only liable for up to $50 if your regular credit cards are lost

or stolen, the zero liability you are getting from premium cards is hardly

worth the extra money.