Find the Perfect Credit Card

I don't know if BillShrink really does help find the perfect credit card, but it's at least a possibility. I have actually made three purchases on my shiny, new credit card, one of which has been paid off in its entirety, the other two of which will be paid on Friday.

They started with a comparison of mobile phone plans and have moved on to credit cards. No doubt if that works out well, they'll think of other products for which consumers would benefit by having easy comparisons available.

I didn't do anything like that. I went to my credit union and asked. My credit isn't as bad as I thought it was and the guy told me that the best way of improving it was by having continuing monthly payments on a credit card; in order to be reported to the credit bureau, one must have a monthly balance. My way of coping with that is by rationing purchases.

I recently had a conversation with a couple of colleagues about credit cards and while they said that having a balance wasn't a problem, they were concerned with the way the rules have changed; so many cards offer loyalty marketing programs which influence one to use the card whenever possible, but now, with the massive credit crunch, banks are focusing on what exactly one charges.

I bought tires and made two online purchases; credit cards have a built-in dispute process so you have some recourse if you order a product but don't receive it or there's a problem. Debit cards are without that protection since the payment comes straight from your bank account. My purchases are likely to be just fine. Especially since I'm paying the balance in full each month.

Problem areas include utility bills and groceries. If you use your credit card to pay for these items, your limit may be lowered or your interest raised as the theory is that you have cash flow problems or wouldn't be putting these sorts of things on your card. On one level that makes sense to me; that's exactly the trap I fell into when I was clerking and wasn't quite making enough money to support myself and my debt both. The people who pay their bill in full each month may get a pass on those, as they don't actually carry an increasing balance. Unlike me, since it seemed like a good idea at the time but snowballed out of control so I wasn't in a good place financially.

So please, do yourself a favor and don't fall into that trap. It's not an easy place to get out of.