Credit cards have gotten a very bad rap over the last few years. This article will show you how credit cards can be used to your advantage, how to keep from making mistakes that can cost you, and most importantly, how to get yourself out of trouble if you’ve already waded in too deep.
Keep track of how much money you are spending when using a credit card. Small, incidental purchases can add up quickly, and it is important to know how much you have spend on them, so you can understand how much you owe. You can keep track with a check register, spreadsheet program, or even with an online option offered by many credit card companies.
When making purchases with your credit cards you should stick to buying items that you need instead of buying those that you want. Buying luxury items with credit cards is one of the easiest ways to get into debt. If it is something that you can live without you should avoid charging it.
If you are in the market for a secured credit card, it is very important that you pay close attention to the fees that are associated with the account, as well as, whether they report to the major credit bureaus. If they do not report, then it is no use having that specific card.
Most people do not handle credit cards correctly. Sometimes debt is unavoidable; however, too many people use credit cards to buy things they cannot afford. This abuse leaves them with payments that they do not have the money to make. One of the best things you can do is pay your balances off each month. By using this strategy, not only does your card maintain a low balance, you also increase your credit score.
If you have credit cards be sure to check your monthly statements thoroughly for errors. Everyone makes errors, and this applies to credit card companies as well. To prevent from paying for something you did not purchase you should save your receipts through the month and then compare them to your statement.
If you have the money to do so, pay your entire balance on your credit statement monthly. In a perfect world, you shouldn’t carry a balance on your credit card, using it only for purchases that will be paid off in full monthly. Using the credit is good for your credit score, and paying off the balance ensures that you will not be paying finance charges.
Plan a budget you will have problem following. Just because you were given a limit by the company issuing your credit card doesn’t mean you need to go that far. Know how much you will be able to afford to pay for that month so you can pay it off each month to avoid interest payments.
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.
To make sure you select an appropriate credit card based on your needs, determine what you would like to use your credit card rewards for. Many credit cards offer different rewards programs such as those that give discounts on travel, groceries, gas or electronics so pick a card that suits you best!
Learn how to manage your credit card online. Most credit card companies now have online resources where you can oversee your daily credit actions. These resources give you more power than you have ever had before over your credit, including, knowing very quickly, whether your identity has been compromised.
You need to pay more than the minimum payment each month. If you aren’t paying more than the minimum payment you will never be able to pay down your credit card debt. If you have an emergency, then you could end up using all your available credit. So, each month try to send in a little extra money in order to pay down the debt.
Only spend what you could afford to pay for in cash. The benefit of using a card rather than cash, or a debit card, is that it establishes credit, which you will need to get a loan in the future. By only spending what you can afford to pay for in cash, you will never get into debt that you can’t get out of.
Don’t open too many credit card accounts. A single person only needs two or three in his or her name, in order to get a good credit established. More credit cards than this, could actually do more damage than good to your score. Also, having multiple accounts is harder to keep track of and harder to remember to pay on time.
Know your credit history before applying for new cards. The new card’s credit limit and interest rate will depend on how bad or good your credit history is. Avoid any surprises by getting a report on your credit from each of the three credit agencies once a year. You can get it free once per year from AnnualCreditReport.com, a government-sponsored agency.
If you have made the poor decision of taking out a cash loan on your credit card, be sure to pay it off as soon as possible. Making a minimum payment on this kind of loan is a big mistake. Pay the minimum on other cards, if it means you can pay this debt off faster.
Some people need help getting out of a jam that they have created, and others are trying to avoid the pitfalls that they know are out there. Regardless of which camp you came from, this article has shown you the best ways to use credit cards and avoid the deep debt that comes along with them.
