Credit cards can help you to manage your finances, as long as you use them appropriately. However, it can be devastating to your financial management if you misuse them. For this reason, you may have shied away from getting a credit card in the first place. However, you don’t need to do this, you just need to learn how to use credit cards properly. Read on for some tips to help you with your credit card use.
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.
If you apply for a store-branded credit card, make sure it is a store that you shop at regularly. Every application for a credit card is recorded on your credit file, even if you do not actually open up a store card account. A report that is peppered with too many credit inquiries like those made by retail stores can hurt your overall credit score.
If you only pay the minimum amount each month on your credit card, only the credit card company benefits. The monthly minimums are deliberately designed to be so low that you will be paying for years in order to pay off your balance. In the meantime, the credit card company will be collecting inordinate amounts of interest from you. Whenever you can afford to, send in payments that exceed the minimum amount. You will save a lot of money on interest in the end.
To make the best decision regarding the best credit card for you, compare the interest rate among several credit card options. If a card has a high interest rate, it means that you will pay a higher interest expense on your card’s unpaid balance, which can be a real burden on your wallet.
If you have a credit card with the high interest you should consider transferring the balance. Many credit card companies offer special rates, including 0% interest, when you transfer your balance to their credit card. Do the math to figure out if this is beneficial to you before you make the decision to transfer balances.
Make sure you use any credit card you obtain wisely. Don’t buy everything you want, limit yourself to what is financially responsible. Before deciding on what payment method to select, be certain you can pay the balance of your account in full within the billing period. When you have a balance on the card, it is too easy for the debt to grow and this makes it more difficult to clear completely.
If you have any credit cards that you have not used in the past six months, then it would probably be a good idea to close out those accounts. If a thief gets his hands on them, you may not notice for a while, because you are not likely to go looking at the balance on those credit cards.
Be aware that there are credit card scams out there as well. Many of those predatory companies prey on people that have less than stellar credit. Some fraudulent companies for example will offer credit cards for a fee. When you send in the money, they send you applications to fill out instead of a new credit card.
Try setting up a monthly, automatic payment for your credit cards, in order 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!
Find a credit card that rewards you for your spending. Spend money on the card that you would need to spend anyway, such as gas, groceries, and even, utility bills. Pay this card off each month as you would those bills, but you get to keep the rewards as a bonus.
You should try and limit the number of credit cards that are in your name. Too many credit cards are not good for your credit score. Having several different cards can also make it more difficult to keep track of your finances from month to month. Try and keep your credit card count between two and four.
Many people, especially when they are younger, feel like credit cards are a type of free money. The fact is, they are exactly the opposite, paid money. Remember, every time you use your credit card, you are basically taking out a micro-loan with incredibly high interest. Never forget that you must repay this loan.
Before you pick a credit card be sure that it is accepted at most businesses in your area. There are only a few credit card companies that are accepted nationwide, so be sure you know which ones these are if you plan to purchase things around the country. Also, if you plan to travel abroad, be sure you have a card that is accepted where you might travel as well.
Stay away from high-interest credit cards. Many people see no harm in getting a credit card with a high interest rate, as they are sure that they will always pay the balance off in full each month. Unfortunately, there are bound to be some months when paying the full bill is not possible.
With your credit card bills, it is important that you make payment no later than your monthly due date. If you pay your credit card bill late, you may be assessed a late payment fee. Paying your bill late can also cause the percentage of interest to be raised on your unpaid balance. These actions will negatively affect your credit score.
By now you should see that you need not fear owning a credit card. Now that you know a little about using them appropriately, don’t avoid credit cards because you’re afraid you will ruin your credit. Have this advice in mind in order to better help your finances when it comes to credit card usage.