Free of Charge — Saving on Credit Cards

by Mike on May 2, 2013

Credit Card fees

In the charge to make financial life fairer for consumers, credit cards have now come into the sights of authorities in both the US and the UAE.

Eighteen states in the US are now looking into legislation that will prevent merchants from applying surcharges when customers use their credit cards. This is bad news for merchants, who apply them to recoup the losses that credit card payments cost them.

Meanwhile, in the UAE, authorities have begun to call for caps on credit card interest rates. The financial panel of the UAE’s Federal National Council believes fees and interest charges are too high, especially those charged by local banks in the UAE. With an average annual interest rate of at least 20% more than both the UK and the US, they may have a point.

So in an era in which saving and making money are more important than ever, how can you use your credit card and save money? Here are a few suggestions.

Keep credit card ownership to a minimum

Some people like to look the part by revealing loads of credit cards when they open their wallet. The truth is they might just be bad at managing their money. Find other ways to pay for things. Of course, there’s nothing wrong with owning more than one credit card, but owning more than two or three is excessive. Besides, think of all the interest that you have to pay.

Consolidate credit card debts

Speaking of interest, consolidating credit card debt by transferring remaining balances all to one card, normally to a balance transfer credit card, is a terrific way to lower your interest payments. Remember that nothing can last forever, though, so check to see when the lower interest rate comes down. Keep an eye out too for any other fees you may have to pay for transferring the balance.

Pay more than the minimum

If you can pay more than the minimum monthly balance on your credit card, do so. This saves you interest. Not only that, it looks better on your credit history. If you have to apply for a personal loan or mortgage, you want to look like you can repay the debt comfortably, and not like you can only just scrap the bare minimum together.

Concentrate on saving

Credit cards are a bit like alcohol: necessary once in a while, but not something you want to depend on too much. Set up a fund for emergency expenses, rather than falling back on your credit card to cover them all the time. Credit cards can get you out of a tight spot, but if they have to on a regular basis it can become expensive.

Naturally, it’s good news for consumers that authorities are trying to make credit cards cheaper to use for them. While they’re doing this, however, you should make your own efforts to do the same. This means making smarter choices about how you use your credit card. Then you don’t have to look like you have plenty of money: you actually will.

For information on financial regulation in the US or the UAE, you can visit the Federal Reserve’s website at or the UAE’s Central Bank website at

{ 1 comment… read it below or add one }

1 KC @ genxfinance May 2, 2013 at 11:53 pm

Great tips as always Mike. Not just pay the minimum but pay what you owe on time. You avoid interest and you are also improving your credit scores. I too only keep 3 credit cards. 2 I used for most of my purchases and the other one is for back-up purposes.

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