How To Use Your Credit Cards Wisely
Posted at by CreditWiz on category Credit CardsMany people have felt the pressure of credit cards throughout the last century. Like most things, credit cards are difficult to deal with if you don’t have the proper knowledge or advice. Featured below is a collection of tips that will increase your knowledge of credit cards.
Try to keep at least three open credit card accounts. This will increase your credit score over time, especially if you don’t carry a balance from month to month. Do not over-do it. Having more than three credit cards can concern a lender looking at your credit report.
Know how closing a credit card will affect you before you do it. Many times it leads to lowering your credit score which you do not want. Also, be sure that you keep a few cards open that are responsible for most of your history, credit wise.
When looking over your statement, report any fraudulent charges as soon as possible. Immediate action you take gives your credit card company an upper hand in catching the thief. This will also prevent you from becoming responsible for too many unauthorized charges. A quick call or simple email may be all that is required for you to report a fraudulent charge.
Many credit card offers include substantial bonuses when you open a new account. These bonuses are often conditional, though. You need to review all of the documentation that comes with a bonus offer thoroughly before you sign up. For instance, it could be listed in your contract that you can only receive a bonus if you spend X amount of money every period. If this is something you’re not comfortable with, you need to know before you enter a contract.
Set a budget and stick to it with regards to your credit spending. You should already be budgeting your income, so just include your credit cards in your existing budget. Do not think of a line of credit as extra money. Set aside an amount of money that you can pay each month on your credit cards, and follow through each month with the payment. Stick with it and pay it every month.
If you are having trouble making your payment, inform the credit card company immediately. If you’re going to miss a payment, the credit card company may agree to adjust your payment plan. This can help to save your credit score.
Be aware of your balance at all times. Make sure that you know of any credit limits that have been imposed by your creditor. The fees will really add up quickly if you spend over your limit. When you continue to exceed the limit, it is going to take much longer to pay it off.
Before getting a credit card, make certain that you completely understand the policies you are agreeing to. You may find that the interest rate, payment schedule and fees, are more than what you initially thought they would be. Make sure you fully understand things like the interest rate, the late payment fees and any annual charges the card carries.
If you cannot afford something, don’t put it on a credit card. Just because you desire to have a new TV, it does not mean that buying using your credit card is a good option. If you can’t pay off the balance right of way, you will risk not being able to make your monthly payments and owing quite a bit of interest. Take your time outside of the store before making a purchase. Normally, the store itself has lower interest than credit cards.
Most analysts state that a credit limit should be no greater than 75% of a monthly salary. If your limit is higher than one month’s salary, work on reducing your balance immediately. The interest on several accounts can quickly get out of control.
Always track the purchases that you’re making with your credit card. Notice how quickly impulse spending and small purchases add up. If you aren’t tracking your credit card balance, you may be surprised when you get your statement at the months end.
As discussed previously, frustration and confusion can often come with attempting to understand your credit card accounts. With the right advice, however, managing your credit cards can be very easy. Knowledge is the key to using credit cards appropriately.