What is the best way to manage credit cards..is it better to put all of your purchases on one card…or spread them onto various cards??? Or…better yet don’t have a credit card all together?!
Depends. If you have card which accumulate miles (like Citi AAdvantage) then its best to put all purchases on that card, to maximize your milage accumulation. Ofcourse, a problem will be, if you have credit limit on the card which is less than your monthly expenses. In which case you will either need to use another card or pay Citi more frequently than just once a month.
It is generally never a good idea to gather a lot of credit cards. Even applying for a bunch of credit cards, when you don't really need them should be discouraged, because all the available credit limit is part of review if you apply for a bigger loan, like mortgage. Banks generally don't like people who have a lot of credit card debt or a lot of credit cards.
Never delay your card payment, cz once you become delinquent then all the favorable APR's are off-limits and the banks are notorious for charging obscene amounts of late fee. Pay the balance in full, if possible. Use a credit card, which provides online access (most do) and keep monitoring your card usage. APR on credit cards is usually much higher than a home equity line of credit, so see if that works for you. Opening APR's on balance transfers are usually for limited periods, so be very careful if using such a facility.
AmEx and Citi (and probably some more) provide virtual credit cards for secure online purchases, so you can enter a new credit card number on online forms, which can only be used once; so even if some hacker gets hold of it, its useless for them.
If you have your main checking account with a decent bank, which provides online banking and online bill payment, see if you can configure it so that it can auto-pay atleast the minimum payment on your credit card every month. So even if you forget to pay the whole thing, you don't get into delinquent list.
Best way is to not use your credit cards for credit... just use them as a means of payment, never spending more on them than you have in your bank account (Insert generic lecture about riba here)
Whenever I can, I always try and put my purchases onto one particular card where I get 1% cashback. The most important thing to do with a credit card, no matter what, is to never let debt accumilate in them. It's really easy credit, but really expensive too.
Hinna
credit cards should be used. how you use credit hslps determine your credit rating, having no credit history is almost as bad as having a bad one.
be careful in the cards you choose, watch for rates, points etc etc. I woudl even suggest that if you make some big charges..like tuition, pay it off over a few months just to demonstrate a history of making payments on the card.
thanks for the tips :)
hmmm now send us consulting fees.
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*Originally posted by Fraudz: *
hmmm now send us consulting fees.
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ahem I thought this was FREE advice?! ;)
oh..need to ask one more question. What sort of rates to business visas/mastercards have? Does anyone have a business visa? Any recommendations on who to get one with??
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*Originally posted by Hinna: *
ahem I thought this was FREE advice?! ;)
oh..need to ask one more question. What sort of rates to business visas/mastercards have? Does anyone have a business visa? Any recommendations on who to get one with??
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Pir sahibs services dont come for free... Whose next in line to see him? Please get your paypal payments ready...
Re: Managing your Credit Cards
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*Originally posted by Hinna: *
What is the best way to manage credit cards..is it better to put all of your purchases on one card...or spread them onto various cards??? Or...better yet don't have a credit card all together?!
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On a side not, if you're going for a bigger loan, e.g. car loan or home mortgage, it doesn't look good to have more than 2-3 credit cards. It actually brings down your overall credit score.
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[oh..need to ask one more question. What sort of rates to business visas/mastercards have? Does anyone have a business visa? Any recommendations on who to get one with??
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I use an Amex Gold Card for business.
dont pay riba(interest), its haraam - quite simple.
Actually, we(me and my wife) use Credit Cards to buy almost everything and pay it off, so we keep a 0 bal, i.e., do not pay interest. This way we can manage our money better since it's all in one consolidated statement.
Best credit card management strategy is to burn or cut up the cards you don't need. Use 1 or 2 credit cards and pay off full balance within the grace period. Don't spend what you don't have.
As regards frequent flyer miles etc, for some credit cards, enrollment in those programs requires an additional surcharge. If ff miles are free, that's just wonderful. If they are not free, I suggest you crunch number to determine the viability of the program for you.
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*Originally posted by zman: *
dont pay riba(interest), its haraam - quite simple.
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yup I know riba is haraam..
I am sure most of you are savvy enough but i at all times try to avoid the ‘debt trap’ as they call it. I never go for the fancy shmachy Smart Installment Plan (it kills, literally) or the ‘leased lifestyle’ as i call it by leasing things i cannot afford as of now. Call me funny, but it doesn’t make much sense to me. It makes me cringe at the mere thought that if i lease a big enough capital item, and half-way down the installment period if i have to pay lumpsum and get out, i would have paid only about 20% of the capital cost of the item…baaqi sab interest kha jaega 
Sorry for going off on a tangent. I needed to vent off looks at his credit card bill and starts to boil
KZ
but the credit worthiness of a person is seen by how they manage debt, not just that they dont have any. Its a huge problem to have no credit history.
and there are things that you have to buy on credit. housing for example. It is diff for ppl in pakistan whoa re staying with family thatthey save enough over a number of years to buy a house on cash, but thats not quite that easy here. So the options are to either get a mortgage, and try to pay more principal amount than in the payment schedule to get it paid off sooner, or to live in a rental place and save enough money to buy a place on cash. Only challenge being that the money uare paying in rent is going nowhere and then as u save up money the value of real estate goes up and keeps going up.
^ Peer Saab. As far as the credit history is concerned, what i meant was i usually pay off the cost of the large capital item that i bought on the credit card, in the same installment period in one bullet payment (i.e. don’t carry it forward at humonous rates). So in essence, i use the card as a substitute, safe and convenient way of paying instead of cash rather than anything else.
I guess you are right about the mortgage thing. My bro told me the same. You are also cent percent right about it being a cultural thing also (here, despite cheap local credit and offtake of the mortgage financing schemes..the mindset has not changed-people still view debt as one laanat or something :D…most of the consumer credit is being utilized for car-financing and a bit of consumer electronics…not much towards housing as such..prolly coz of longer tenors of 15-25 years compared to cars etc…unhain apni aane wali saari naslein qarzay main doobi nazar aati hoon gi shaid 
)