Some people say that dealing with credit cards can be a real challenge. However, if you have the right guidance, credit card issues will be much less of a burden on your life. This article provides several tips to help anyone understand more about the credit card industry.
When you are unable to pay off one of your credit cards, then the best policy is to contact the credit card company. Letting it just go to collections is bad for your credit score. You will find that most companies will let you pay it off in smaller amounts, as long as you don’t keep avoiding them.
Avoid being the victim of credit card fraud by keeping your credit card safe at all times. Pay special attention to your card when you are using it at a store. Double check to make sure you have returned your card to your wallet or purse, when the purchase is finished.
If you have financial problems in your life, tell your card company. If there is a possibility that you may have to miss one payment, by contacting the company that issued your credit card, you might be able to work out some sort of adjusted payment plan. This might prevent them from reporting any late payments to the major credit bureaus.
Read all correspondence from your credit card company and other financial institutions right away. Credit card companies can make changes to annual fees, interest rates and membership fees by advising you in writing. It is within your rights to cancel the card, if you don’t wish to agree to the changes.
Always know what your utilization ratio is on your credit cards. This is the amount of debt that is on the card versus your credit limit. For instance, if the limit on your card is $500 and you have a balance of $250, you are using 50% of your limit. It is recommended to keep your utilization ratio of around 30%, in order to keep your credit rating good.
Before making an online purchase with your credit card, you need to make sure that you are dealing with a legitimate seller. You should contact whoever runs the site on the phone prior to ordering and don’t use a company that has no real address on their website.
Make sure that you watch your statements closely. If you see charges that should not be on there, or that you feel you were charged incorrectly for, call customer service. If you cannot get anywhere with customer service, ask politely to speak to the retention team, in order for you to get the assistance you need.
If you are going to make purchases over the Internet you need to make all of them with the same credit card. You do not want to use all of your cards to make online purchases because that will increase the chances of you becoming a victim of credit card fraud.
If you can’t get a credit card because of a spotty credit record, then take heart. There are still some options that may be quite workable for you. A secured credit card is much easier to get and may help you rebuild your credit record very effectively. With a secured card, you deposit a set amount into a savings account with a bank or lending institution – often about $500. That amount becomes your collateral for the account, which makes the bank willing to work with you. You use the card as a normal credit card, keeping expenses under that limit. As you pay your monthly bills responsibly, the bank may decide to raise your limit and eventually convert the account to a traditional credit card.
An important tip when it comes to smart credit card usage is, resisting the urge to use cards for cash advances. By refusing to access credit card funds at ATMs, you will be able to avoid the frequently exorbitant interest rates, and fees credit card companies often charge for such services.
Never apply for more credit cards than you actually need. It’s true that you need a few credit cards to help build your credit, but there is a point at which the amount of credit cards you have is actually detrimental to your credit score. Be mindful to find that happy medium.
It is vital that you keep any credit card accounts open for a good amount of time. Switching to another account should only be done in specific circumstances, as it is a detrimental event otherwise. Your credit score is affected by the overall duration of your account history. Keeping accounts open whenever possible is one element of building a good credit history.
Prior to applying for a credit card, try to build your credit up at least six months in advance. Then, be sure to take a look at your credit report. By doing this, you are more likely to get approved for the credit card and get a higher credit limit, as well.
To avoid excessive fees, always read the fine print of any credit card offer you are considering. Many offers come with a low introductory APR and can be quite enticing. However, further review of the fine print may reveal that that low rate will be increased to a less than appealing rate in as little as 6 months or a year.
If you have gotten in over your head with credit, and have no idea how you will pay back your debt, don’t give up just yet. Many companies now have hardship programs which you can enter, that will lower your interest, set you up on a payment plan you can afford, and save you the damage of bankruptcy or litigation.
As was discussed earlier in the article, some people have a hard time understanding credit cards at first glance. However, with more information, they can make much more informed and suitable choices relating to their credit card decisions. Follow this article’s advice and you will ensure a more successful approach to managing your own credit card or cards.
