Charge cards are usually associated with high interest rates and bad spending in the economy. However, if used properly, it offers peace of mind, convenience and even rewards and perks. Read this article to discover some of the positive side of credit cards.
Understand what your interest rate will be. It is crucial that you know the rate of interest prior to getting a credit card. When you don’t know this, you could possibly have a much higher rate than you anticipated. If you’re paying more, you may not be able to afford to pay off the debt each month.
Only apply for store cards with merchants you shop there on a regular basis. When stores submit an inquiry into your credit history for a card, it gets recorded on your credit report whether you open the card or not. Too many inquiries into your credit score go down.
You can save time and money by setting up automatic payments.
Never lend your credit card to a family member or friend. Even if it’s a good friend that needs something badly, it’s not smart just to lend a card out. This can lead to excessive charges, over the limit fees, and other problems if your friend happens to charge more than they should.
Set yourself a fixed budget you can stick to. You don’t need to max out your credit card just because you can spend. Be aware of what you should set aside for each month so that you can do that consistently and avoid those interest charges.
Bank cards can be attached to various loyalty programs. If you use it smartly, you can end up with an extra income stream.
Once you do open a credit card account, aim to keep it open for as long as possible. Don’t switch to another credit card account unless you really have to. How long you have had different accounts open plays a factor in how good your credit score is. A good way to build your credit is to keep your accounts open.
Always read every letter you get regarding your credit cards right when it arrives. You can cancel your account if you disagree with any changes.
Do not lend other people your cards. Even if it is a great friend of yours, it’s not smart just to lend a card out. It may lead to large fees if your friend spends more on the card than you authorized.
Use debit cards first instead of credit cards to avoid unwanted debt. Doing so helps to focus your spending on your debit card and prevents inadvertent use of a credit card in a rush.
Credit Card Offer
You get another credit card offer. You might be looking for a new card, but then again, it is far more likely that you are not. Always rip up any credit card offer that comes through the mail.
If you are transferring the balance from one card to another, at a lower introductory interest rate, make sure you understand the terms and conditions. Try to pay off your balances before the introductory period ends. Many times the interest will be incredibly high later on. Always do your homework, so you know where you will be going with these cards.
Most analysts state that a charge cards should be no greater than 75% of what your salary is every month. If you owe more than that, begin paying it down right away. This is because the interest charges will quickly snowball out of control.
Avoid prepaid cards if you are looking for cards. These are considered debit cards so they don’t report to the credit bureaus. A lot of them will charge additional fees and are nothing more than a checking accounts. Put down a deposit and get yourself an actual secured credit card so that it reports to the credit bureaus, and acquire a secured credit card.
Fully pay off your monthly credit card charges when you receive the bill. Each month that you don’t pay off your card, you will end up with a finance charge. Paying only minimum payments will increase the time it takes to pay off the credit card because of the finance charges.
Credit Cards
When used responsibly, credit cards have some great perks. From offering financial flexibility to repaying you with rewards, credit cards can be a helpful, enjoyable part of your life. Take the information that has been given to help you gain success with your cards.
Remember that the use of a credit card is not a right, but a privilege. Being responsible with your cards helps your credit score, while acting irresponsibly can lead to financial disaster. Responsible credit card owners pay their credit card bill each month and track every charge.