Credit Card Tips That Can Change Your Life!
Posted at by CreditWiz on category Credit CardsWith all of the credit card horror stories out there, it is no wonder that some people are afraid of credit cards. You don’t have to be fearful of credit cards. They are very useful when you respect them. This article presents some tips to follow to ensure you use your credit wisely.
Try to keep at least three open credit card accounts. This will help you build one’s credit score, particularly if you pay your bill in full. But, if you have more than three cards, lenders may not view that favorably.
Many credit cards offer significant bonuses for signing up for a new card. Make sure you are aware of all the details associated with such bonuses. One of the most popular ones is requiring you to spend a predetermined amount of money in a couple of months to be eligible for any offers.
Card issuers designate minimum payments so that they stand a better chance of maximizing the profits they make on interest charges. Whenever you can afford to, send in payments that exceed the minimum amount. This helps you steer clear of expensive interest payments down the road.
Avoiding late charges is important, but you also want to avoid going over your limit because you will be charged for that as well. Both are pretty steep, and the cost of going over the limit can not only affect your wallet but also your credit report. Watch carefully and don’t go more than your credit limit.
Keep a close eye on your balance. You should also remain aware of your credit limit. If you exceed your card’s credit limit, you could be charged some hefty fees. This will make it harder for you to reduce your debt if you continue to exceed your limit.
Understand the credit card agreement before you use that card. As a general rule of thumb, usage of a credit card represents acceptance of all terms in the credit card’s agreement policy. Although the print may be small, it is extremely important to read the agreement fully.
When looking for a new card, find one that has low interest and fees. There are many credit cards available with no annual fee, so choose one of these to save you money.
Do not allow anyone to use your cards. Even if it’s a good friend that needs something badly, it’s not smart just to lend a card out. Doing so can cause over-limit charges when someone else charges more to the credit card than you said he could.
Financial experts agree that you should not let your debt on a credit card go above a level equal to 75% of your salary each month. Also, you should never allow yourself to have a limit that exceeds your monthly salary. If you do, pay that card off and ask for a limit reduction. The interest on several accounts can quickly get out of control.
Try not to close your accounts. It might seem like this would be good on your credit rating, but it can actually make things worse. This is because the ratio of how much you currently owe is compared to how much total credit you have available.
If you use credit cards, consider obtaining a free credit report every year. Check to ensure that all the information is correct. Ensure that your credit report and annual statements match up.
Some people think that avoiding credit cards altogether will help their credit because they won’t have any debt. If you want to build on your credit score, then one credit card is necessary. If you are going to use it, pay the total debt at each statement. If you have no credit history, your credit score will be low and possible lenders will not have the assurance you can handle debt.
The credit card tips in the article above should help to alleviate credit card fears. If you use a credit card responsibly it can actually be extremely useful. Just use the information you’ve learned here and your fear of credit cards will be a thing of the past.
