Ralph Moss Limited

SMART MONEY MOVES

How to cut plastic credit costs.

Plastic credit can be costly, so it pays to cut it where you can. The best way is to avoid interest costs altogether by paying all charges within 21 days of the statement date. If you can't do that, here are some other ideas:

• First pay those with the highest interest rate, usually credit cards issued by department stores or other retailers
• Consider a low-interest credit card. However, be aware that low-interest cards have annual fees so there's no net saving unless you usually carry a hefty outstanding balance.
• If it's going to take several months to pay your balance, consider arranging a low-interest loan.
• Bonus points or rebates that help pay for goods or services when you use some credit cards can be worthwhile. Points can be used for such things as air travel or the purchase of a car or home.

Be cautious.
Several years ago one credit card From a large bank offered 5% rebates to be applied to the down payment on a first home. The catch was you had to take out a mortgage with the interest rate set for a five-year term, while rates for one-year terms were considerably lower.

YOUR MOVE. Pay off credit charges as quickly as you can. Make sure bonus points don't entice you to spend more than you otherwise would. If they cause you to incur interest costs, the "savings" could be dubious.