You have to know a few things prior to using a credit card. If you’re not using it right, then you may find yourself in financial trouble. In this article, you will learn a few tips about using credit cards and how you can get the most out of them.
Be wary of late payment charges. Many of the credit companies out there now charge high fees for making late payments. Most of them will also increase your interest rate to the highest legal interest rate. Before you choose a credit card company, be sure that you are fully aware of their policy regarding late payments.
When you are unable to pay off one of your credit cards, then 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.
Don’t pay any fees upfront when you are getting a credit card. The legitimate card issuers will not ask for any money upfront unless you’re getting a secured credit card. When you are applying for a secured card, be sure to find out how the deposit is going to be used.
If you need to use credit cards, it is best to use one credit card with a larger balance, than 2, or 3 with lower balances. The more credit cards you own, the lower your credit score will be. Use one card, and pay the payments on time to keep your credit score healthy!
Before you ever use a new credit card, it is important to carefully read through all of the terms of the credit card agreement. The majority of card issuers see the initial purchase as your acceptance of a card’s terms. You should literally read the fine print.
Keep an eye on your credit cards even if you don’t use them very often. If your identity is stolen, and you do not regularly monitor your credit card balances, you may not be aware of this. Check your balances at least once a month. If you see any unauthorized uses, report them to your card issuer immediately.
Only take cash advances from your credit card when you absolutely have to. The finance charges for cash advances are very high, and very difficult to pay off. Only use them for situations in which you have no other option. But you must truly feel that you will be able to make considerable payments on your credit card, soon after.
Always know what your utilization ratio is on your credit cards. This is the amount of debt that is on the card versus your credit limit. For instance, if the limit on your card is $500 and you have a balance of $250, you are using 50% of your limit. It is recommended to keep your utilization ratio of around 30%, in order to keep your credit rating good.
If you are determined to stop using credit cards, cutting them up is not necessarily the best way to do it. Just because the card is gone doesn’t mean the account is no longer open. If you get desperate, you may ask for a new card to use on that account, and get trapped in the same cycle of charging you wanted to get out of in the first place!
An important tip for saving money on gas is to never carry a balance on a gas credit card or when charging gas on another credit card. Plan to pay it off each month, otherwise, you will not only pay today’s outrageous gas prices but interest on the gas, as well.
The interest rate in the initial offer is not always the interest rate your card will have. Credit card issuers have several interest rates they can use at their discretion. If you are unhappy with your current interest rate, simply call your credit card company and ask for a lower rate.
Never allow yourself to open too many credit card accounts. Instead, find two or three that really work for you and stick to those. Having too many credit cards can harm your credit and it makes using money that you do not have that much easier. Stick to a couple of cards and you will remain safe.
Do not close active credit accounts. This may seem like a smart thing to do when trying to raise a credit score, but it actually can damage the score. This is so because it subtracts how much credit you can have from your overall credit. Then it lowers how much you owe and how much credit you are able to maintain.
When you receive your credit card accounts, check them carefully rather than just filing them away without a second glance. Make sure that the changes you made are accurate, and be on the lookout for questionable charges. Always inform your issuer of problems as soon as possible. This will help you to avoid paying more than you should, and this may help with your credit score as well.
If you get into trouble, and cannot pay your credit card bill on time, the last thing you want to do is to just ignore it. Call your credit card company immediately, and explain the issue to them. They may be able to help put you on a repayment plan, delay your due date, or work with you in ways that won’t be as damaging to your credit.
If you have had a secured card that has stayed in good standing for a while, a company may be willing to offer you a credit card that is unsecured. Also, you may receive offers in the mail. At this time you can begin making more credit decisions.
As you can see, with the proper research, you can get the most out of your credit cards. Apply the tips you have just read so that you can use a credit card responsibly. Don’t ruin your credit score by not using this advice and you can have a better experience with them.