Great Tips For Using Credit Cards The Right Way
Posted at by CreditWiz on category Credit CardsCredit cards usually are seen as indicators of high interest rates and too much danger when using them to spend. However, when used properly, credit cards provide many benefits, such as financial peace of mind, while also offering the chance to earn rewards and perks. To find the benefits of credit cards, read on for great tips and advice on how they can help.
The reason why card companies suggest minimum payments is simply because this amount is how much they want you to pay in order for them to get the largest amount of money from you as possible over a longer period of time. Always try to make payments larger than the stated minimum. Paying off your balance faster helps you avoid expensive finance charges over the life of your debt.
Make a realistic budget to hold yourself to. You should not max out your card just because a certain amount is available on your card. Know your monthly income, and only spend what you can pay off in full each month. This will help you to avoid owing interest payments.
Outweigh the benefits of having a credit card against the costs of using it before making purchases. You might later find that your fees, payments and interest rates are different than what you expected. The fine print can be daunting, but a little effort can make a huge difference in your financial situation.
Never let anyone borrow your credit cards. Even if a close friend really needs some help, do not loan them your card. Lending out a credit card can have negative results if someone charges over the limit and can hurt your credit score.
Keep a close watch on your credit rating. Most creditors think of 700 as the lowest number you can have while still being considered to have good credit. Be smart with the way you are using your credit. With a credit score of at least 700, you will receive the lowest interest rates and best credit offers.
Maintain a contact list that includes issuer telephone information and account numbers. Put the list somewhere safe, in a place that is separate from where you keep your credit cards. This list will help you if you ever lose your credit card or are a victim of a robbery.
Financial experts advise that you should not have a credit limit greater than three-quarters of the income you bring in every month. If you have credit limits that are more than you make every month, you need to start paying off that debt right away. Otherwise, you may soon be paying a lot more interest than you can afford.
A good thing to remember is that you should not immediately make a credit card payment after you make a charge. Instead, pay the balance of the card in full as soon as you get your statement. This helps your credit score and gives you a better payment history.
Avoid using your credit card to pay for meals at restaurants, as the charges sometimes take a while to appear on your credit card statement, so you could underestimate your available credit. That may cause you to spend greater sums of money, because you had the impression that more credit was available to you.
When used carefully, credit cards are very beneficial. Whether its financial flexibility, emergency funds, or accumulating rewards, credit cards can really make your life quite a bit easier. Use the knowledge you gained to manage your credit card, and build good credit.