5. Know the details of rewards programs
I review tons of rewards programs, and I can tell you that some of them are the pits. Not that the programs don't have great rewards, but they explain it in a convoluted fashion. Sometimes you even have to look at several websites to get the whole picture.
You can search the card name online with something like "rewards program" and see what pops up. Yes, it's tedious, but it helps to know everything about the program so you can take advantage of it. The flip side, of course, is that there are also land mines in the details.
You want to make sure you read everything, because you could find nuggets like "if your card is inactive for 12 months, you'll lose your rewards."
6. Check your credit card statement for errors
You want to look for billing errors and possible fraud and check your balance. If you want to, you can check your account online every day. Should you find a billing error, you're protected by Fair Credit Billing Act. You have to write to your credit card issuer within 60 days of the statement date that contains the error. The issuer must respond within 30 days and conduct an investigation within 90 days. Get more details about what to include in your letter here.
If you don't get an acceptable response from your issuer, file a complaint with the Consumer Financial Protection Bureau. But first you have to try to resolve it with your credit card issuer on your own.
7. Stay safe online
This is more in the area of protecting your identity, but it's also a part of protecting your credit life. Even though credit cards do offer a lot of financial protection against losses as long as you report them quickly, losses can create havoc for you and your credit file when it comes to straightening it all out.
Just take this simple precaution: Make sure you see "https" instead of just "http" in the Web address. The "s" indicates a secure site. And make sure you don't give out your card number on sites you're not familiar with or in response to email solicitations.
8. Know the details regarding 0% introductory offers
It might seem odd that I want you to protect yourself against 0% interest rates. But here's the problem -- and I'm talking about both purchase and balance-transfer offers -- it's easy to get blinded by "you pay 0%!" and forget to look at the details.
This can lead to debt, a wrecked credit score and tons of angst in general. Before you grab one of these intro offers, look at the go-to rate. If you're getting 0% interest on purchases for 12 months, you'd better keep track of your balance. Don't wait until the eleventh month to realize that the intro period ends in one month, not in seven months. This situation will be even worse if you've got a $4,000 balance and -- yikes -- you just noticed the go-to rate is 16.99%.
A similar problem occurs with balance-transfer offers. You might feel sure you can pay the balance off during the 12- or 18-month intro period. But what if you can't? Be sure you can live with the ongoing interest rate (aka the annual percentage rate, or APR) if necessary.
9. Before you travel, alert your credit card issuers
If you're traveling, call your bank so you don't unwittingly trigger a fraud alert on your account. Banks are pretty diligent when it comes to monitoring consumer behavior. If your spending patterns suddenly change, the bank may suspect your card has been stolen.
And if your card account gets frozen, you'll have to turn to other forms of payment, which could not only get expensive but won't offer the same purchase protections as your credit card does. To be safe, carry two cards with you so you have a backup.
10. Remember that business cards aren't covered by the Credit CARD Act
You know what's interesting? Business cards are making a comeback. In fact, the national average for interest rates on consumer cards is 14.91%. For business cards, it's 13.13%. It's a good time to get a business card, but keep in mind that you don't have the same protections -- from sudden interest rate increases, for example -- that you have with consumer cards.
For those with a thriving business who need cards for employees and who want spiffy management tools, it's hard to pass up these cards. So proceed with caution, and avoid carrying a large balance. Just in case.
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