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Saving Money With Credit Cards

I’m back with more info on how full time RVers can save money every day to make the best of their lifestyle by saving on and with credit cards. While the purists will all tell you to dump all credit cards and live on cash only, in the real world you cannot buy a new tow vehicle or RV without a good and recent credit history nor will you be able to rent or buy a house if medical issues or other unforseen circumstances pull you off the road. You need available credit for emergencies out on the road. Even with good insurance, you will have to wait to be reimbursed for expenses so how will you pay for a motel or repair in the meantime? A good cash reserve is certainly a must but a good credit reserve also helps. If you are already in debt, you can still create a plan to pay it off with the help of another credit card at a better rate and a balance transfer if used wisely.

If you are like many others, you got your first credit card many years ago, were just glad anyone considered you worthy, and are still using the same plain Jane credit card. Big mistake! Credit cards evolve. They are highly competitive and offers change all the time. It isn’t just about interest rates anymore. Now they offer 0% interest charges for up to 16 months on balance transfers, new purchases, or both. Moving high debt from old cards with ridiculously high interest rates to a new card with a lower interest rate will help you pay it down faster and save money. If you can pay it off during that introductory 0% interest rate, then you will really save a bunch of money. Be sure to read the terms and be sure they apply your payments to the old debt first or you will need to use the new card for the balance transfer only with no new debt added. Another great thing about new card offers is many now come with extras like insurance coverage when renting a car, flight insurance, added years of warranty protection on items purchased with the card, etc. My favorite is cash back. How would you like 1%-5% cash back on all purchases? How about 6% back on groceries? Would you like to get a special lower price on theater tickets purchased with your card? Most cards also have no yearly fee though that should not be a deal killer. Look at the full offer. No yearly fee and 3% back on groceries compared to a $75 yearly fee and 6% cash back on groceries. How much do you spend on groceries a year? What really makes these deals work to save money is to use the credit card instead of a debit card to pay for your daily necessities but pay the entire bill off every month with no carryover. You may want to get a separate card just for that purpose and with the best rewards deal you can find. Maybe you are a frequent flier. If so, get a card that rewards with sky miles. Do you cruise a lot? There are cards that reward in cruise points. Find a new card that matches your lifestyle.

A card deal that is the best for one person’s situation may be terrible for another’s. A card recommended as best for balance transfers may have some catch such as low initial limits that are hard to get raised. A lower interest card may seem good for balance transfers but is it a good deal if your situation has changed such that you can pay off all debt on a card during a 0% introductory rate term? Do you fly enough to be able to get enough frequent flyer miles for a trip or would cash back on gas be better for you? Read the recommendations on several websites, read the comments on them in discussions, compare the offers, look for the catches, then take your pick and apply. I know it sounds complicated but it isn’t really. The deals are usually pretty clearly spelled out in tables and the reviews and comments help you find the gotchas.

Wondering how to find these great deals if they aren’t just pouring in to your mailbox? There are lots of financial sites out there that evaluate and report on current credit card deals. They also provide links to apply and get an answer within minutes. You can Google "best credit cards" to find them. You should start with CreditKarma.com. The ads on TV may be annoying but they really are free and provide a LOT of information about your credit situation to get started. You may find you have better credit than you thought. You may also find some bill you missed during all your traveling so you can take action to fix the problem and improve your credit. They have a lot of excellent credit articles on their website too which you should take some time to read. Some of the info is surprising. Not everything you "know" about credit is necessarily correct. They will also explain the safe way to apply for another card or cards without killing your credit score and give you your odds of getting approved for each card they recommend. Be sure any card you apply for has a way to pay online since you will be traveling or you may need to setup automatic payment.

A word of caution: do NOT cancel your old credit cards. Doing so will affect your credit score two ways and lower it. Scoring agencies look at how many cards and loans you have which can be both good and bad. They also look at the overall length of time your accounts have been open (longer is better) and the ratio of how much debt you have compared to how much credit is still available. They want to see 10 + year old paid on time accounts. They want to see that while you may be carrying some debt, it is not more than 30% of the total credit available. If you close a credit card with say a $10,000 available limit on it, you just raised your debt ratio way up thus making you look like you are in financial trouble when you aren’t. The same thing happens when you close your older accounts in favor of newer accounts with much less positive credit history. They just plain don’t want to see account closures no matter what the reason for the closure. Be sure to pull the old cards out once in a while and charge something on them then pay it off to keep the cards active or the credit card company may close the accounts themselves to get them off the books.

You should also have more than one card in your wallet. Have you ever been somewhere far away from home and had your card declined at the register, especially around the holidays? I know I have. Credit card companies try to protect us by looking for unusual activity. If they don’t know you just drove 1,000 miles to gawk at a big hole in the ground and see a charge coming in from the Grand Canyon, they may decline the charge. Do they know you are a full time RVer and rarely in your home area? While I personally would never tell them that since it makes them nervous, I do tell them I travel a lot. Around the holidays, security gets even tighter so things they let go before will now get extra scrutiny and action. With another card in your wallet from a different card company, you may still be able to checkout. If both get put on hold, you will need to call the phone numbers on the back of the cards to explain the situation and get cleared but you can do that right from the store on your cell phone. What you tell them is up to you but don’t lie and you may want to give them a special heads up call around the holidays or when cruising out of the country to let them know to expect out of area charges. For cruising, provide specific dates or just go with plenty of cash and use the safes cruise ships provide.

Being on the road, it is real easy to pile up debt on credit cards with the cost of gas, campgrounds, and emergencies. A new lower rate credit card with a balance transfer deal may help. If you have managed to stay out of debt on your cards, are you also making the most of them to save money with cash back reward cards? You should be! Would you throw away all the smaller fish you catch just to wait until you catch that one big fish? Four or five small fish can make a tasty meal just as 1% – 6% cash back all year can make for a mighty nice Christmas present or a free cruise or flight to warmer winter climates.

As part of your fulltime RVing life, credit cards can sink you or help you. You need them at least for that emergency far away from home and to build credit for your next RV purchase but they can also help save on the costs of fulltime RVing if used wisely and you get the right credit card. Sticking with credit cards you have had for years that offer no extra benefits and perhaps higher rates will make your RV life less than it could be.

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