Understand What Credit Cards Are All About

Posted at by CreditWiz on category Credit Cards

Set a budget when it comes to your credit cards. Many people think a budget is only for the bills you owe; however, you should also set a budget for credit card usage. Do not consider your available credit as extra income. Set a limit for yourself on how much you are able to spend for your credit card every month. Stick to that budget and pay it in full every month.

Keep a watchful eye on your balance. Also know your current credit limit so that you avoid exceeding it. If you inadvertently go over your credit limit, you will either be heavily penalized or your credit card will be blocked. It will take longer for you to pay the balance down if you keep going over your limit.

Credit cards can be tied to various types of loyalty accounts. Find a perks or royalty program which suits your spending habits. These programs can provide a source of income, when they are used wisely.

Never write your pin number or your password down under any circumstances. Memorizing your PIN or password is essential, and it helps to ensure that only you can access your account. If you write down a PIN or password, especially if you put it in your wallet with your card, anyone can access it.

Create a list of your credit cards, including the account number and emergency contact number for each one. Keep your list in a safe place that is separate from your cards. The list is useful as a way to quickly contact lenders in case of a lost or stolen card.

Avoid prepaid cards when you are looking for a secured card. Prepaid cards are essentially debit cards, so your activity with them does not improve your credit. A lot of them charge additional fees and they are nothing more than checking accounts. Apply for a true secured card that reports to the three major bureaus. This will require a deposit, though.

Never send you card number to someone by fax. Not all fax machines are located in secure locations, so you have no idea who could read the fax and note down your credit card details. Anybody in the office is a potential thief. This opens you up to fraudulent activity and all of the problems that come with it.

Don’t lie about your income when applying for credit cards. Some credit issuers never verify income, and this could result in you spending more than you’ll be able to pay back because they gave you a high credit limit.

Always review your credit card bills and monitor your transactions. A good way to do this is to get mobile alerts. This will allow you to question and report any irregularities or suspicious activity right away. Suspicious activity should be reported to your bank and the police as soon as possible.

Remember to have the necessary discipline when you are using your credit cards. Many consumers are addicted to spending and create more debt than they can manage. Credit cards are a bad idea for these kinds of people. Opening a credit card account can put your financial future at risk if you don’t have self-discipline.

You might be tempted to use credit cards for everything, but it’s better to avoid them when making small purchases. A minimum charge amount is often required by vendors, and that could mean that you will have to buy extra things to meet the minimum. Save credit purchases for $10 or more.

It is smart to contact your credit company before using the card for something out of the ordinary. Large purchases or international trips are two good times to notify the company. Doing this will keep your card from being frozen for suspected identity theft.

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