Credit cards can help you to manage your finances, as long as you use them appropriately. However, it can be devastating to your financial management if you misuse them. For this reason, you may have shied away from getting a credit card in the first place. However, you don’t need to do this, you just need to learn how to use credit cards properly. Read on for some tips to help you with your credit card use.
It is a good practice to have more then one credit card. This can build up a credit score, and this is especially true if you’re able to pay them monthly. However, if you open more than three, it may not look good to a lender when they pull your credit bureau report.
If you find that you have spent more on your credit cards than you can repay, seek help to manage your credit card debt. It is easy to get carried away, especially around the holidays, and spend more than you intended. There are many credit card consumer organizations, that can help get you back on track.
In order to minimize your credit card debt expenditures, review your outstanding credit card balances and establish which should be paid off first. A good way to save more money in the long run is to pay off the balances of cards with the highest interest rates. You’ll save more in the long term because you will not have to pay the higher interest for a longer period of time.
Credit cards frequently are linked with various types of loyalty accounts. If you use a card all the time, you need to find one with a useful loyalty program. This can provide you with extra income, airfare, or other rewards, if you use the card wisely.
Do not make purchases with your credit card for things that you can not afford. Credit cards are for things that you purchase regularly or that fit into your budget. Making grandiose purchases with your credit card will make that item cost you a great deal more over time and will put you at risk for default.
Don’t disregard any emails or letters about changes in your credit card terms. Often, you will find credit companies changing their terms or conditions on a regular basis. Many times, the terms that are buried deep in legal language, particularly the changes, that are most important. Be certain you read what’s out there to see if there are negative changes to your agreement.
Avoid the temptation to lend your credit cards to anyone. Even if a close friend needs to use one, don’t do it. Doing so can result in over the limit fees if your friend charges more than you allowed them to.
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.
Experts recommend that the limits on your credit cards shouldn’t be any more than 75% of what your monthly salary is. If you have credit limits that are more than you make every month, you need to start paying off that debt right away. Interest on your credit card balance can quickly escalate and get you into deep financial trouble.
If you ever have a charge on your card that is an error on the credit card company’s behalf, you can get the charges taken off. The way you do this is by sending them the date of the bill and what the charge is. You are protected from these things by the Fair Credit Billing Act.
Do not sign up for store cards in order to save money on a purchase. Often times, the amount you will pay for annual fees, interest or other charges, will easily be more than any savings you will get at the register that day. Avoid the trap, by just saying no in the first place.
Shop around for different credit cards. Interest rates and other terms tend to vary greatly. There are also various types of cards, such as cards that are secured which require a deposit to cover charges that are made. Make sure you know what kind of card you are signing up for, and what you’re being offered.
Always pay off the whole balance of your credit card if you possibly can. If you have a credit card that has an interest rate more than 0%, then you have to pay a charge every month if you don’t pay the card off in full. If you choose only to pay the payment suggested by the credit card company, it will take quite a while to pay off your credit card bill due to finance charges.
If have a missing or stolen credit card, report it as soon as possible to the card issuers. Several companies have a 24-hour service and toll free number on their statement for this reason. To protect yourself, after calling, write a letter to every issuer. The letter should provide your card’s number, the date it went missing, and the date it was reported.
If you want to maintain your credit accounts, use them on a regular basis. If your account is inactive and unprofitable for your credit card company, they have every right to shut your account down with minimal warning. Try to use credit cards to purchase things that you already have the money to pay for, then pay the credit card bill as soon as it arrives.
By now you should see that you need not fear owning a credit card. You now know what to do to protect your credit using a card, so there’s no reason to avoid credit card use altogether. Remember what you read if you need help using credit cards properly to improve your credit.
