Having a credit card makes it easier for people to build good credit histories and take care of their finances. It is important to be educated on credit cards so you make educated choices. The following contains advice on credit cards that can help people get better at using their cards, so they don’t damage their credit score and get into debt.
Do not lend your credit card to anyone. Credit cards are as valuable as cash, and lending them out can get you into trouble. If you lend them out, the person might overspend, making you responsible for a large bill at the end of the month. Even if the person is worthy of your trust, it is better to keep your credit cards to yourself.
Do not use one credit card to pay off the amount owed on another until you check and see which one has the lowest rate. While this is never considered the best thing to do financially, you can occasionally do this to make sure you are not risking getting further into debt.
Use credit cards intelligently. Limit your spending and only purchase things with your card that you can afford. Before using credit cards to get something, you need to know if you’re able to pay it off right when you get a statement. If you use your card for more than you can afford, it is easy for debt to begin accumulating and your balance to grow even faster.
Always pay your credit card on time. Every credit account has a due date, which triggers a late fee if you have not yet made your payment. You also run the risk of being charged a higher interest rate on any purchases, which reduces your overall buying power.
If you have a credit card account and do not want it to be shut down, make sure to use it. Credit card companies are closing credit card accounts for non-usage at an increasing rate. This is because they view those accounts to be lacking in profit, and therefore, not worth retaining. If you don’t want your account to be closed, use it for small purchases, at least once every three months.
In order to get the best credit cards, you need to keep tabs on your credit record. Credit card companies always use credit scores to determine what kinds of cards they will offer consumers. In order to get accepted for credit cards that have low interest rates, lucrative reward schemes and low fees, you need to have a stellar credit score.
If you are having a problem getting a credit card, consider a secured account. A secured credit card will require you to open a savings account before a card is issued. If you ever default on a payment, the money from that account will be used to pay off the card and any late fees. This is a good way to begin establishing credit, so that you have opportunities to get better cards in the future.
Look into whether a balance transfer will benefit you. Yes, balance transfers can be very tempting. The rates and deferred interest often offered by credit card companies are typically substantial. But if it is a large sum of money you are considering transferring, then the high interest rate normally tacked onto the back end of the transfer may mean that you actually pay more over time than if you had kept your balance where it was. Do the math before jumping in.
You should try and limit the number of credit cards that are in your name. Too many credit cards is not good for your credit score. Having several different cards can also make it more difficult to keep track of your finances from month to month. Try and keep your credit card count between two and four.
Try to reduce your interest rate. Call your credit card company, and request that this be done. Before you call, be sure you know how long you have had the credit card, your overall payment record, and your credit score. If all of these show positively on you as a good customer, then use them as leverage to get that rate lowered.
Every time you use a credit card, think about the extra expense that it will incur if you don’t pay it off immediately. Remember, the price of an item can quickly double if you use credit without paying for it quickly. If you keep this in mind, you are more likely to pay off your credit quickly.
Now it is probably clear that credit card usage can help people as they work on building up their credit history and taking control of their money. Understanding the individual cards is essential though, as this helps individuals to make educated choices. Knowing what to expect from having a credit card will help you make better choices.
