What Is The Right And Wrong Way To Use Credit Cards?

Posted at by CreditWiz on category Credit Cards

Credit cards can be a useful tool. They allow a consumer to make a purchase and defer payment. Before applying for a new credit card, there is some basic knowledge that you should be aware of in order to prevent yourself from getting into insurmountable debt. Read on for some great tips on how to be smart about using your credit cards.

Do not close any credit card accounts without finding out how it affects your credit report. Sometimes it is better to leave an unused credit account open than it is to close it. Choose to keep the accounts that you have had open the longest that make up your credit history.

Only inquire about opening a retail credit card if you are serious about shopping at the store regularly. When stores submit an inquiry into your credit history for a card, this gets reported on your credit report whether or not you ultimately get the card. A large number of inquiries that is present on a credit report can decrease your credit score.

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 costly, but you will pay not only the fees tied to these mistakes, but your credit score will dip as well. Watch your spending so you don’t exceed the credit limit.

If you are having trouble making your payment, inform the credit card company immediately. A credit card company may work with you to set up a payment plan you can afford. This could help because they may not end up reporting your late or missed payment to the credit agencies.

Pay each month’s credit card bill on time. There is always a due date for your monthly card payment, and neglecting the date will result in costly late charges. In addition, most credit card companies will raise your interest rate, meaning all of your future purchases will cost you more.

Don’t use an easy-to-guess password for your card’s pin code. Don’t use something obvious, like your birthday or your pet’s name, because that is information anyone could know.

Never give your credit card information to anyone who calls or emails you. Scammers commonly use this method for getting your number. You should never reveal your credit card number to businesses you do not trust, and even with your own card company you should only supply your number if you initiated the call. Don’t just give these numbers out when someone asks on the phone. It doesn’t matter who they say they are if you don’t know the person.

If you are not happy with your interest rate, ask your bank to change it. Make it clear to your card provider that you must have a more favorable rate. If they cannot provide one, it’s time to look for a card with a better rate. Once you find a company that is better for you, switch to them.

If you have bad credit, try to get a secured card. A balance is required as collateral with these kinds of credit cards. In other words, you will be borrowing money that is yours while paying interest for this privilege. It is probably not the most appealing option in the world but sometimes you have to do this to repair a poor credit score. If you want a secured credit card, stick with large, well-established credit card companies. They might offer you better cards later which can further enhance your credit score.

Avoid closing an account. Open accounts always help a credit score while closed accounts can end up hurting it. This is because the ratio of how much you currently owe is compared to how much total credit you have available.

Many times charges for restaurants take longer to arrive on your credit card statement. You could actually end up spending more than you realize because your balance is higher than it looks.

Credit cards can help you, if you understand how to use them wisely. The tips offered here have offered information that if used can help you properly use credit cards.

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