There are many ways you can use your credit cards more effectively and reduce costs as well. Here are some tips that I've gathered from various sources.

Ask to have the annual fee waived
If you do a lot of business (banking, mortgage, car loan) with a financial institution and have one of their credit cards, talk to the manager of your local branch about waiving the annual fee. It's done more often than you might think and the savings can be significant if you use a premium card. I personally know of a case where the CIBC waived both the regular annual fee and the supplemental card charge for three years on an Aerogold Visa card, for a total saving of $ 510 to the couple who were smart enough to ask.

Ask for a discount for paying cash
Most card companies expressly forbid discounts for cash payments in their merchant contracts. But some stores and restaurants will still offer a lower price to people for paying in cash rather than plastic. Their incentives are to save transaction fees and to receive their money up front, without having to wait for the credit card company to pay them. The typical discount is 5 percent but we know of some merchants who will offer up to 10 percent for cash transactions. They won't have a sign posted, so ask before you pay.

Have corporate and personal cards
If you incur both personal and business expenses on your credit card, use a separate one for each purpose. Doing this has three benefits. First, identifying charges that can be included on an expense account or that are tax-deductible will be easy. Second, you won't run the risk of business charges, such as a plane ticket, pushing your personal credit limit over the top. Finally, and perhaps most important, if you carry a personal balance you won't be paying interest charges on business expenses.

Make billing cycles work in your favour
If you don't already know the billing cycle on your card, find out. Then use it to your advantage whenever appropriate. For example, if you have a major purchase coming up, such as a new appliance, delay it until after the current billing cycle ends. If you know that every card statement you receive only includes purchases made to the fifteenth of the month, buy that new stove on the seventeenth. That gives you an additional four weeks of free use of the card company's money. Of course, this only works to your advantage if you pay off your account balance in full on a regular basis.

Use the charitable donation tactic
I usually make all my charitable donations once a year, in the week between Christmas and New Year's. Since the billing cycle for the card we use most ends on the twentieth of each month, this offers an opportunity for some credit card manipulation. By making the donations through credit cards, I receive a tax receipt for the current fiscal year. However, I'm not required to actually make payment until about February 10 of the following year. This means I don't have to receive the income to cover those costs until then. This strategy can be especially effective for people who have some control over the timing of their income, such as owner/managers.

Make your credit card payments online
Most major financial institutions now enable you to make online transfers from your chequing account to your credit card account. This won't save you any more than the price of a stamp, but it's the ultimate in convenience because you can schedule your transfer in advance, to take place on the due date. No more worries about missing a deadline because of delays in the mail. You can print up a receipt as proof that the transfer was scheduled in the event anything goes wrong.

Beware of cash advances and credit card cheques
It's happened to almost everyone. You open an envelope and there are some neat-looking cheques in your name, along with a letter from your credit card company inviting you to make use of them in whatever way you wish. Your immediate response should be to tear them up and throw them away. Better still, shred them––the last thing you need is for someone to find the discarded cheques in your garbage and make use of them illegally. This kind of ploy is a great money-maker for the card companies because they usually start charging interest on the day the cheque is used (or a cash advance is obtained) rather than waiting for the end of a billing cycle. So even if you always pay your balance in full, you still end up with an interest cost if you act on their "generous" offer.

Excerpted from Get Control of Your Money by Gondon Pape, Copyright 2003 by Penguin Canada. Excerpted with permission by Penquin Canada. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.