Credit cards: 'tis the season for sorting out complexities

More credit cards are probably used - and abused - in December than any other time of the year. This is when some people charge more than they can afford to repay, lose their cards, have their cards or card numbers stolen and used by someone else, or give their card numbers over the phone to merchants and salespeople they never heard of before. Fortunately, says Grace W. Weinstein, many people seem to be getting better informed about the rights, obligations, and limits that go along with carrying credit cards around.

But while there's more understanding about the safe use of these cards, there's more confusion, too, she says. More businesses and companies are offering their own credit cards, and the features and restrictions on Visa and MasterCard are increasingly complex.

``There are more cards being introduced by different people,'' Ms. Weinstein says. ``Sears has its Discover card. American Express has the Optima Card. A lot of different perks and permutations are being offered on different cards.''

Weinstein, a financial writer and author of ``The Lifetime Book of Money Management'' (New American Library, New York, $12.95), is working with Visa Inc. to promote the responsible use of all credit cards, especially, one assumes, the Visa card.

In just the last year or so, she says, people have begun noticing how much they're paying for their credit cards. They're starting to pay attention to things like interest rates, annual fees, grace periods, penalties, and bonuses.

``I think people are paying better attention,'' she says. ``I think that we often take the path of least resistance, though, and if the place where we do our banking is offering us a card, that's the place we go. It can be more difficult to scout a low-interest or low-fee card from a different area of the country, and to take the trouble to apply for it, but it can be well worth it in the long run.''

Weinstein's own Visa card, for instance, comes from a bank in Delaware, even though she lives in New Jersey. It has a fairly high annual fee, she says, but she gets 1 percent of all her charges rebated on her bill. Because she travels and uses her card a lot, she says, ``I'm sure I more than make up for the fee with the rebate.''

Her card also has a high interest rate, but that doesn't matter to her, since she pays off her entire bill every month.

That's a key to selecting the card with the right interest rate or annual fee, she points out.

``Look at your own spending patterns and get the kind of card you need,'' she says. ``If you're going to extend payments, get the lowest interest rate, and if you're not going to extend payments, get the lowest fee.''

You can get a list of banks offering the lowest interest rates and a separate list of banks with no annual credit card fees from Bankcard Holders of America, 333 Pennsylvania Ave. SE, Washington, DC 20003. Each list is $1.50.

Watch for penalties, too. Some banks advertise a fairly low rate, like under 15 percent, and a 25- to 30-day grace period, but hit you with a $10 penalty charge if your payment is even one day late.

This time of year, the biggest danger isn't from high rates or fees, it's from people not being careful about whom they give their credit card numbers to. Buying presents from legitimate mail-order companies that you contact first, either over the phone or through the mail, will almost always be no problem.

But you should never give your card number to any enterprise or person who calls or writes to you first.

``I will not give my credit card number to somebody who contacts me,'' Weinstein says. ``There's still a lot of fraud in this business. The companies have managed to curtail some of it, but the potential is still out there.''

Then, she adds, there are ``all of these scams that call you up or send you a post card saying you've won a prize or you've won a vacation, but they need your credit card number for verification. Don't do it.''

Her rule even applies to charities. ``I had a charity call me the other night and I agreed to support it and they said, `Well, we can take your card number over the phone.' And I said, `No, send me a bill and I'll pay you by check.'''

While men and women are better informed about the wise use of their credit cards, Weinstein says many women still aren't taking advantage of the opportunities available to establish credit in their own name.

``Women in their 20s and 30s may be tuned into this,'' she says. ``I'm not sure the woman who's been married for many years, who's been paying all the bills, and enjoying credit with her husband, is really aware of the fact that that credit may not be hers and she may not have a credit identity.''

Many women who are recently divorced or widowed, she observes, discover they have no personal history at a credit bureau, which can make it difficult or impossible to get a loan or a credit card in their own name.

It's fairly easy to fix that while a woman is still married, she says. All that's needed is a letter or phone call to the credit card issuer explaining that all payments on the account should be credited to the husband and the wife. The credit issuer may have a special form for this; if so, have one sent to you.

``Then, six months or so later you should check with the local credit bureau and see that it's been done,'' she says.