Credit cards can be a wonderful financial tool that enables us to make online purchases or buy things that we wouldn’t otherwise have the cash on hand for. Smart consumers know how to best use credit cards without getting in too deep, but everyone makes mistakes sometimes, and that’s easy to do with credit cards. Keep reading for some solid advice on using your credit cards best.
Obtain a copy of your credit score before you begin applying for a credit card. Credit card companies will determine your interest rate and credit conditions by using your credit history, among other factors. Checking your credit score before you apply will ensure you get the best rate possible.
When it is time to make monthly payments on your credit cards, be sure that you pay more than the minimum amount required. If you only pay the small amount required, it will take you longer to pay your debts off, and the interest will be steadily increasing.
When you cannot pay off one of your credit cards, the best policy is to contact the credit card company. Letting it just go to collections is bad for your credit score. You will find that most companies will let you pay it off in smaller amounts, as long as you don’t keep avoiding them.
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.
Please do not accept the first credit card offer you receive, regardless of how good it sounds. While you may be tempted to jump on an offer, you do not want to take any chances of signing up for a card and then see a better deal shortly after from another company.
Make friends with your credit card issuer. Most major credit card issuers have a Facebook page. They might offer perks for those that “friend” them. They also use the forum to address customer complaints, so adding your credit card company to your friend list is to your advantage. This applies, even if you don’t like them very much!
Credit cards should always be kept below a specific amount. This depends on the amount of income your family has, but most experts agree that you should not be using more than ten percent of your cards total. This helps ensure you don’t get in over your head.
Set yourself a budget you can stick with. The limit placed on your card is not a goal to be reached, so you don’t need to send it to the max. You can minimize the cost of using a credit card if you stick to a budget that allows you to pay your balance off in full every month.
Anyone in the market for new credit cards is wise to look for cards with no annual fee and low-interest rates. It doesn’t make sense to pay an annual fee when many credit cards charge no fee.
Don’t use an easy pin for the card, or you are setting yourself up for trouble. Common information like names or birthdays is easy to guess and should be avoided.
Keep your receipts from all online purchases. Check the receipt against your credit card statement once it arrives to ensure that you were charged the correct amount. If it differs, file a dispute of charges with the company as soon as possible. This method ensures that you are always charged the correct amount on all your purchases.
As a general rule, you should avoid applying for any credit cards with any free offer. More often than not, anything that you get free with credit card applications will always come with some catch or hidden costs that you will regret later on.
Fully read the disclosure statement before you accept a credit card. This statement explains the terms of use for that card, including any associated interest rates and late fees. By reading the statement, you can understand the card you choose to make effective decisions regarding paying it off.
Try setting up a monthly, automatic payment for your credit cards to avoid late fees. The amount you need for your payment can be automatically withdrawn from your bank account, and it will take the worry out of getting your monthly payment in on time. It can also save money on stamps!
Keep your accounts open. You may think that closing accounts are a good idea, but it can harm your credit. This is because you will be reducing the total amount of credit you are given while still owing the same amount. The ratio between the two will look worse as a result.
Every time you use a credit card, think about the extra expense it will incur if you don’t pay it off immediately. Remember, the price of an item can quickly double if you use credit without paying for it quickly. If you keep this in mind, you are more likely to pay off your credit quickly.
Do not go on a spending spree just because you have a new card with a zero balance. This is not free money, and it is money you will eventually have to pay back, and going overboard with your purchases will only hurt you in the long run.
Credit cards can be quite useful, but they can also hurt us when we don’t use them right. Hopefully, this article has given you some sensible advice and useful tips on the best way to use your credit cards and manage your financial future with as few mistakes as possible!
