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7.1 SWITCH TO ANOTHER CREDIT CARD

==Card Type A: Some credit cards have no fee, and interest rates as low as 14% plus a 1%-3% rebate on purchases. If you pay your balance each month, you will save money with this kind of card.

The rebate can come in different ways. For example, I have a Visa card issued by a gas company. When I fill up my car, the card automatically deducts my accumulated credit. In short I don't have to think about it.

There are numerous other rebate cards, such as ones that offer frequent flier miles or credit toward buying a new car. I find these involve more work.

==Card Type B: Other credit cards have a low annual fee and a very low interest rate. If you carry a balance, this would be your best bet.

For example, one calculation showed a $624 savings over two years by switching from an 18% credit card to a lower interest card.

7.1.1 HAVE TWO CREDIT CARDS THAT YOU USE DIFFERENTLY

Use one card for convenience, such as gas and meals. Pay it off every month. NEVER! let the balance ride. Use card Type A for this (see 2).

Have a second card for some needed planned expenses and large unplanned emergencies (such as car repair). Pay the balance off over time, but always pay more than the minimum. Card Type B is best (see 2).

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