Creators Syndicate

FIGHT BACK!  BY DAVID HOROWITZ 

        If you're one of those fortunate people with a solid- gold
credit rating, you probably have more than one credit  card. And
chances are, you regularly receive flyers in the  mail from other
credit-card issuers that want you to carry  their cards as well. If you
simply throw those flyers away  like junk mail, you may be missing an
opportunity to get the  most credit for the least money. 
        Right now, there is intense competitive pressure build- ing in
the credit-card industry. In order to promote their  cards, banks and
other lenders are offering special promo- tional rates to attract new
customers. That's why it pays to  read those flyers in the mail.
Typically, these cards will  of-fer an interest rate that is far below
current rates for a  limited period, usually six months to a year.
After that, the  interest jumps up to competitive rates. Many will
waive the  annual membership fee for the first year or offer the card 
free for a minimum number of purchases per year on the card. 
        Often, that low rate is available only if you transfer  your
balance owing from another card to the new one. That's  fine. Do it.
You may cut your interest by half or more. Just  remember, that low
promotional rate won't last forever. You  should plan to have that
balance paid off by the time the  special rate expires. That means
keeping your purchases under  control and your monthly payments high
enough to eliminate  your balance owing. If you pay only the minimum
payment due  each month, you will never pay it off. 
        Something else to watch out for are those "checks" that  come
with some credit-card accounts. Each check you write  against your
credit-card account is a cash advance that is  added to your balance
owing. And there is usually a hefty fee  for using them. Here again,
some card companies will waive  that fee if the check is used to pay
off another card. But  that's usually a limited-time offer. 
        The last time I wrote a column on this subject, someone  asked
me if I was suggesting using one credit card to pay off  another. No --
that's a danger-ous trap! The whole idea is to  pay off your
credit-card balance at the best possible rate --  and not just shift
that debt around from one lender to  another. Doing that will cost you
big bucks in the long run. 
        Another source of cheap credit is the Same As Cash in-
stallment purchase. We saw a lot of these during the recent  Labor Day
sales. Retailers offered extended terms on major  purchases with no
payments due and no interest for six, 12  and even 18 months. That's
fine, as long as you can actually  pay off that debt in full by the
deadline. If you don't, then  you will be charged all that back
interest from the date of  purchase -- and at very high rates. If you
can't pay it off  in cash by that time, then shop around for a
lower-interest  consumer loan. You'll get a better rate than the
retailer's  lender is offering. 
        Properly managed, credit is a useful and valuable re- source.
Improperly managed, it can be a crushing financial  burden. The secret
is in knowing how much you owe on which  accounts and how much you're
paying on the outstanding  balance. That way, when a better deal comes
along, you can  take advantage of it to lower your credit costs. 
        If you have any questions or comments, please write to  David
Horowitz in the Consumer Forum+ (go FIGHTBACK). COPYRIGHT 1994 CREATORS
SYNDICATE, INC.