Knowing When And When Not To Use Your Credit Card
Posted at by CreditWiz on category Credit CardsThere is no doubt that credit cards are great for online shopping and for other types of purchases for which you do not wish to use cash. If you are looking for some information to help you select and use your credit card wisely, the following article will be quite helpful.
Keep track of your purchases made by credit card to make sure that you do not spend more than you can afford. You can easily lose track of what you have put on the card if you do not commit to keeping track of the charges on a spreadsheet or notebook.
You want to try and avoid the fee for going over your limit just as much as late fees. Both of these are pretty large fees and going over your limit can put a blemish on your credit report. Pay attention and make sure you stay under your credit limit.
Set a realistic budget, so that you are able to stick to it. Even though you have a credit card limit your company has provided you, you shouldn’t max it out. Plan out how large of a payment you can afford in respect to paying off your entire balance each month.
Those of you looking to get a new credit card should limit their search to cards that have low interest rates and do not have an annual fee. There are plenty of cards you can get that don’t have an annual fee associated with them, so they are pretty much a waste of your money.
Do not document your password or pin number. It is important that you remember your password, so that you are the only one that has access to it. Writing your pin number down increases the chance that someone else uses it.
Never let anyone borrow your credit cards. It could be your close friend, but it’s still a bad idea to give it to someone. If your friend charges more than you had expected, you may be stuck with over-limit charges as well as a huge credit card bill.
If someone calls you up and asks you for credit card information out of the blue, don’t give it out. That is a common trick of scammers. Only give your card number to businesses you can trust. Never give this information to someone who has called you. Regardless of who they say they are, you cannot be sure.
Some have the mistaken idea that having no credit cards is the best thing they can do for their credit. It is important to have one card or more in order to build credit. Utilize it and be sure to make your monthly payment. If you do not have any credit cards, your credit score will be lowered and you will have a harder time being approved for loans, since lenders will not know able you are to pay off your debts.
If you are looking for a secure card, try to stay away from a prepaid card. These are not actually reported to the big credit bureaus and are really just debit cards in disguise. Many prepaid card providers also charge extortionate fees for each transaction. Choose a secured credit card (which requires a deposit) instead. The company will report your account to the credit bureaus and benefit your credit score.
When you have a credit card account, the best practice is to keep it open for the longest possible amount of time. Switching to another account should only be done in specific circumstances, as it is a detrimental event otherwise. This can have a direct effect on your credit score since length of history with a creditor is a factor in the scoring process. Part of having good credit is keeping the accounts open.
Hopefully, this article has provided you with the information you are searching for. You cannot be too careful when it comes to your credit, and often, the realization of a mistake comes after the damage has been done. Factor the above advice into your credit spending strategy so that you can gain all of the benefits of your credit, while minimizing the risks.