Credit Card Tips for 2013, Part I

Like liberty, the price of good credit is eternal vigilance. Here are a few credit card tips to help you stay alert in 2013.

If there’s one thing the average consumer can use, it’s more credit card tips. Sure, it’s hard to keep them all in mind as we make our purchases; but if even one of them helps, it’s worth the effort of learning ’em all.

That’s why I’ve got a little set of tips for you to consider as you push your way deeper into 2013. Some are basic common sense; think of those as refresher courses. A couple, though, cover new practices that I see sucking more and more people in. Let’s do those first.

Fear the Bonuses

Remember the old saying: “If it looks too good to be true, it probably is”? Some card issuers have started offering sweet sign-up bonuses — on the order of 50,000+ reward points, assuming you spend a certain amount of dollars in a certain amount of time.

Aye, there’s the rub. Often the time is incredibly short, just a few months, with the spending amount set high–$3,000-5,000 is not uncommon. And that’s down from a $10,000 high last year. Unless you use your card for large business purchases, it’s doubtful that this will be worth the expense.

Some also waive the first year’s membership fee, which can be high indeed ($450 for Amex Platinum and $475 for Mercedes-Benz Amex Platinum, for example). But then you’re stuck with a card with a high yearly fee every year afterward. Think twice before signing up.

Speaking of Small Business Credit Cards…

Small business credit cards are great, if only because they make Brand You official. But here’s the thing. If you sign up for the card as a sole proprietorship, you typically do so using your Social Security Number, which means it goes on your personal credit report.

As a sole proprietorship, you are the business. So if that company card gets overloaded and things go south for your business, you’re liable for paying off every cent personally–or your credit score will go in the toilet. You can’t even afford to make a late payment.

Worse, small business cards don’t provide the same protections under the Credit CARD Act that you get with your personal card, so don’t expect the card issuers to be nice about how they handle your account — even if someone steals the card and runs up a huge bill. They may get up to their old billing tricks again, too.

We’ve Only Just Begun

Both these problems are starting to tangle up a lot of people, pulling them down into that credit pit where most card issuers like to keep us. But there are plenty more where those came from. In Part II, we’ll take a look at a few.