Credit cards have gotten a very bad rap over the last few years. This article will show you how credit cards can be used to your advantage, keep from making mistakes that can cost you, and, most importantly, get yourself out of trouble if you’ve already waded in too deep.
Keep track of how much money you spend when using a credit card. Small, incidental purchases can add up quickly, and it is important to know how much you have spent on them to understand how much you owe. You can keep track with a check register, spreadsheet program, or even with an online option offered by many credit card companies.
You should contact your creditor if you know that you will not be able to pay your monthly bill on time. Many people do not let their credit card company know and pay very large fees. Some creditors will work with you if you let them know the situation ahead of time, and they may even end up waiving any late fees.
Make timely payments on your credit card accounts to maintain a high credit score. If your payments are late, your credit score can suffer, and hefty fees are frequently imposed. It can be very helpful to set up an automatic payment schedule through your bank or credit card company.
Take the time to play around with numbers. Before you go out and put a pair of fifty-dollar shoes on your credit card, sit with a calculator and figure out the interest costs. It may make you second-think buying those shoes that you think you need.
Before beginning to use a new credit card, you should carefully review the terms stated in the credit card agreement. The first time you use your card is often considered to denote acceptance of the agreement terms. It may be fine print, but it is still very important.
Never use a credit card to buy things you can’t afford. If you want a big-ticket item, you should not necessarily put that purchase on your credit card. You will pay loads of interest, and the monthly payments may be out of your reach. Slow down and think things over before deciding whether to buy an expensive item on credit. If you still want to buy it, you should consider the financing offered by the store since the interest rates are usually lower.
You may consider using layaway instead of credit cards during the holiday season. Credit cards, traditionally, will cause you to incur a higher expense than layaway fees. This way, you will only spend what you can afford during the holidays. Making interest payments over a year on your holiday shopping will cost you far more than you may realize.
Look into the rewards that credit card companies offer. Find one that will pay you for making purchases on their card. If you are trying to maximize the rewards, charge everything you can on the card, but be sure to put enough cash back to pay the card off each month to avoid losing your rewards to interest fees.
It is good to avoid walking around with any credit cards on you that already have a balance. If the card balance is zero or very close, it is a better idea. Walking around with a card with a large balance will only tempt you to use it and make things worse.
Use cards that cautiously offer you a low-interest rate with a balance transfer. In many cases, that rate is only available for a short period. When that time expires, the rate might jump to three or four times that amount. Make sure that you understand the terms and make an educated choice about choosing and using these cards.
Use debit cards first instead of credit cards to avoid unwanted debt. You will be more likely to choose your debit card over your credit card, even if you are in a rush.
Be certain to understand the terms of any rewards programs your cards offer. Read all the documentation thoroughly. Your card may have blackout dates that negate the program’s point in the first place. Credit card providers often make restrictions difficult to find and understand. Most companies do not want you actually to redeem their rewards. They are just a hook for getting you to apply.
Don’t pay credit card bills with the same card. Some people borrow from their credit card to mail in a payment and get through the month in an emergency. This trick is a losing game, in any case. The fees and interest rates that stack up through this procedure can rapidly become crippling, turning a short-term credit crunch into a perpetual one.
Unless you plan on having a credit card that is secured, you should never pay money upfront to obtain one. Legitimate companies do not do this. Moreover, never pay any individual or company who claims they can help you get approved for a credit card. A reputable company will give you a card without fees if you have a good credit score.
If you are looking for one of your credit card accounts to close, do not make it your oldest card. The longer you have a solid credit card on your report, the better it looks on your report and gives you a better score. If you consider it because of high-interest rates, contact your creditor and request a reduction in interest rates.
Some people need help getting out of a jam they have created, and others are trying to avoid the pitfalls they know are out there. Regardless of which camp you came from, this article has shown you the best ways to use credit cards and avoid the deep debt that comes along with them.
