Most credit cards come with a grace period to pay off your monthly balance. What this means is that you have an additional amount of time to pay off the monthly balance on the credit card. This typically varies between 10 days to 25 days.

This is also one area that the customer needs to be very aware of. Grace period comes with a lot of conditions and penalties (in the form of high interest charges) can be imposed on the customer. Some of these conditions could be items like:

1. You have not paid off your last months balance in full. The grace period will not apply to this unpaid balance but rather to new purchases only.
2. If you have not paid off your last months balance in full, some credit card companies impose interest rate on new purchases also from the date of purchase.
3. Grace period typically does not apply to cash advance or balance transfers. Interest charges start right away.

As always, you should read the terms and conditions of the credit card offer before applying. You should also check the interest rate they will be charging you for not paying on time and if your introductory interest rate will be revoked if you are unable to pay.

All of us use credit cards on a daily basis whether it is for personal use or for business. Credit cards have become a daily part of our life and we cannot imagine living without a credit card.

While having a credit card is a necessity in today’s life, we have to be responsible on how we use it and pay off each month. The credit line we get on our credit card should be considered a loan that needs to be paid off each month, not a loan that we can pay interest on. Credit card interest rates are usually much higher than other loans after the expiration of introductory periods. In addition, the introductory rates come with a lot of strings that need to be reviewed carefully as a violation of these conditions can lead to a much higher interest rates, some as high as 21% APR.

Credit cards also offer a lot of benefits in terms of cash back and rewards. So, how should one go about choosing a credit card? First of all it is useful to understand your spending patterns i.e. where do you use the credit card most. Some examples include:

1. Airfare: Purchasing of airfare tickets
2. Gasoline: Purchasing of gas for your vehicles
3. Business: Do you use credit cards for business purchases like hotel, food, inventory etc.
4. Groceries: Do you use credit cards for your grocery purchases including wholesale like Costco, Sams Club etc.
5. Student: Are you a student and have low to no income?
6. Entertainment: Do you use credit cards for hotels, restaurants etc.

Understanding these spending patterns can help you decide which cards rewards programs will benefit you most.

Once you figure this out, the next step is to understand the credit card offers. Most credit cards come with the following offers:

1. Introductory APR: This is the interest rate that credit card company charges you when you get a new credit card. Typically you will get 0% APR for a 6 month period.
2. Regular APR: This is the interest rate you will pay on outstanding balances once the introductory period is over.
3. Balance Transfers: Does the credit card allow you to transfer balances from your other credit cards?
4. Annual Fee: These are the fees that you have to pay every year to keep the card and avail its rewards programs. Most cards have $0 or low annual fee for the first year.
5. Credit Needed: To get low APR offers or to get approved you will need to verify the credit needed on the card. Getting denied on your application can affect your credit score negatively.
6. Rewards: Most credit cards offer rewards in terms of cash back, airline points, gas points, hotel points etc. Determine which rewards are most important to you before you apply.

With the current financial meltdown and credit crisis it has become very difficult to get a loan. All kinds of loans for cars, homes, line of credit etc. have become much harder to get. Everyone in the media including TV, Newspapers, Internet, Blogs etc. are all talking about how difficult it has become to secure loans and thus it is stifling the economy.

We are also seeing banks file for Chapter 11 on a very regular basis and those not filing for Chapter 11 are getting bought for pennies on the dollar. Just today there was news of Citi merging with Wachovia and Wells Fargo. This begs a more fundamental question: Is your money safe? i.e. is the money in your bank account safe so that you can withdraw it when you need it.

This led me to do some research and I found a very recent and detailed ranking done by Bankrate.com. They rate every Bank/Thrift and Credit Union on a five star rating scale, five being the best.

I have had my bank account with the same credit union for over 11 years with no trouble at all. Love the bank, its service, products etc. But, when I saw that it was rated a 2 star on this website, I found it prudent to open another bank account with a bank that was 5 star rated and move half of my savings account into this new bank account. The whole process took me less than an hour and I feel a lot better as I have spread my risk across two banks.

In these tough financial times, it is a prudent and easy to apply strategy. I would encourage everyone to check Bankrate.com and see how their bank is rated. Even if it is rated highly, it may be worthwhile to spread your savings across two banks just to reduce any exposure.