Everyone should have one credit card simply to build good credit and learn basic money-management skills. You must understand how the card works to avoid problems. The following article offers some basic ideas on credit card use that any consumer can apply to their circumstances to use plastic more wisely.
Before canceling a credit card and closing your account, ensure you understand how canceling it affect your credit. Sometimes it is better to leave an unused credit account open than it is to close it. Furthermore, work on keeping open the cards you have had the longest.
In order to maintain a high credit card, ensure you are paying off your card payment on the day that it’s due. Paying your bill late can cost you both in the form of late fees and in the form of a reduced credit score. Setting up an automatic payment schedule with your credit card company or bank can save you time and money.
Double check for annual fees when signing up for premium bank cards. Depending on the card, annual fees for platinum or other premium cards, can run between $100 and $1,000. If you don’t need an exclusive card, keep this in mind and avoid the fees.
Always pay your credit card on time. If you do not pay your credit card by the due date, you will incur hefty charges. In addition, most credit card companies will raise your interest rate, meaning all of your future purchases will cost you more.
Before using your credit card online, check to verify that the seller is legitimate. You do not want to deal with a merchant that does not provide a physical address on his or her site. Dial up the phone numbers shown on the merchant’s site to verify that they are in operation.
Keep track of your credit score. Most creditors think of 700 as the lowest number you can have while still being considered to have good credit. Proper use of charge cards can be one way to improve or maintain a good credit score level. By having a score of seven hundred or higher, you will get the best offers and you will have the lowest rates at the same time.
If you are shopping around for secured cards, stay away from prepaid cards. These are actually debit cards, and they do not report to the major credit bureaus. A lot of them charge additional fees and they act just like a checking account. Put a deposit down and get a secured card that reports to the credit bureaus and helps to improve your score.
Do not tell other people of the number of your credit card. Often times, people ask this information through the internet or through the phone. Do not do this if you do not know the company you’re dealing with. Be extra careful if you receive an unsolicited offer for which credit card information is requested. There are a lot of scams that people try to use to collect credit card numbers. Take appropriate measures to protect yourself.
Don’t use your credit card for more than you can pay off. If you can’t make your payments, you risk damaging your credit score. If your credit score goes down, it can affect a few different things, including the ability to find housing, get a car loan, your auto insurance premiums, and in some cases, your employability.
Make sure to verify all charges and fees that are associated with a credit card that you are considering, instead of just focusing on the interest rates and the annual percentage rate. The card may come with additional fees and charges that make the card unbearable.
Don’t get your kid a credit card if he or she is not ready to handle the responsibility. Though it’s certainly difficult to tell them no, waiting until a level of maturity is established can be the best way to help your child avoid a financially devistating situation.
Don’t be fearful to pay your credit card with a separate credit card if it has better fees or rates. Even if you are working with two cards that offer the same interest rates, one might have rewards or incentives that make it the better choice. Just don’t do anything rashly. Sit yourself down and carefully add up the numbers before deciding to pay off one credit card with another one.
Do not always go for credit card rewards, like airline miles, if they do not make financial sense. Charging everything to your card will eventually net you the rewards you are looking for. However, you may get interest and fees equal to several flights.
As you have seen, charge cards can be a great help in building or re-building a person’s credit, as well as a tool to help one learn to make wise choices with their money. Knowing the differences between cards is key, because it facilitates wiser choices. Having a good understanding about how credit card companies operate can be very advantageous for consumers.