Credit cards can be useful for making purchases online and for transactions which would require a lot of cash. If you need some advice on how to use credit cards responsibly, the following tips can offer you some guidelines.
It is wise to have two or three different credit cards available for your use. This will increase your credit score over time, especially if you don’t carry a balance from month to month. You should have no more than three open credit cards. If you have more than three credit cards, it may be more difficult to qualify for a loan.
Before opening a store credit card, look into your past spending and make sure that it is high enough at that store to warrant a card. When stores submit an inquiry into your credit history for a card, this gets reported on your credit report whether or not you ultimately get the card. Too many inquiries into your credit history will be a red flag to possible lenders and will lower 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 in order to pay off your balance. In the meantime, the credit card company will be collecting inordinate amounts of interest from you. Always try to make payments larger than the stated minimum. You will save a lot of money on interest in the end.
Plan a spending budget that you will be able to stick to. Simply because a card issuer has given you a spending limit, you should not feel obligated to use the entire amount of credit available. Understand the amount you can realistically afford each month so that you will not incur interest charges.
Be sure to read the fine print on a credit card account before using it. The first time you use your card is often considered to denote acceptance of the agreement terms. The print on the agreement may be small, but it is important to read it carefully.
Understand fully the terms and conditions of a credit card before you apply for it. You might later find that your fees, payments and interest rates are different than what you expected. Read all the fine print so that you totally understand the card’s terms.
Open and go over everything that is sent to your mail or email about your card whenever you get it. Credit card companies are allowed to make certain changes to fees, regular interest rates and annual membership fees, as long as they give you written notice of the changes. If you don’t like the change, you may cancel your account.
You can save yourself money by asking for a lower interest rate. If you have an established history with the company, and have made timely payments, you may be able to negotiate a better rate. A single phone call can get you a better interest rate and help you to save a lot of money.
Monitor your credit score. Good credit requires a score of at least 700. This is the bar that credit companies set for trustworthiness. Proper use of credit cards can be one way to improve or maintain a good credit score level. When your score is 700 or more, you will receive the best offers at the lowest rates.
Try not to close your accounts. Although you may think this will improve your credit, it could actually hurt your credit 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.
Don’t lie about your income to get a higher limit credit card. Sometimes, a credit card company won’t verify your income, and give you a limit that is more than you can afford. This is a very quick way to get into a large amount of debt.
If you spend some time proving yourself responsible with secured credit cards, the card company may be ready to let you have an unsecured one. Also, you may receive offers in the mail. You will need to decide which cards are best suited for your use and circumstances after a thorough evaluation of the situation.
If you are able to do so, don’t get a card that has an annual fee. Cards with no annual fees are typically reserved for people with higher credit scores. Most often, such fees counteract the perks a card may have. Calculate it for yourself. Credit card providers don’t usually advertise annual fees, instead they include them in the small print. It is time to pull out your favorite pair of glasses. Assess whether the card’s fees are a more substantial factor than the its possible benefits. Most of the time, they do not.
You may have a good payment history, and a good credit score, but still be paying a high interest rate on your credit card. Ask your company to lower the interest rate. In some cases, they will work with you. A lower APR will help you to save a considerable amount of money if you ever have to keep a debt on your card.
Use cards regularly to avoid their deactivation. If they lie dormant, some creditors will close them with very little warning since it is not profitable for them. Use your credit card accounts to cover things you actually have money to cover, then pay the bill right away.
Don’t pay upfront fees for your credit cards unless you are seeking a credit card that is secured. This is not a practice that a legitimate company will engage in. Moreover, never pay any individual or company who claims they can help you to get approved for a credit card. If you have decent to good credit, you can get the credit card on your own.
This article was written with the intention of providing you with reputable credit card information, hopefully, it has served its purpose. Nobody can be too vigilant with their credit card spending and debt, and many people rarely discover the errors of their ways in time. Reasonable credit card use will increase your credit score while giving you more spending power.