Knowing When And When Not To Use Your Credit Card

Irresponsible credit card usage often teaches consumers lessons about overspending, borrowing too much money and the frustration of higher interest rates. However, if used properly, they could offer great benefits, rewards and even peace of mind. The article below discusses some of the ways to best use credit.

TIP! Never close out a credit card account without making sure that you know how it will affect you. Many times closing an account can lower your credit score and will show up negatively on your credit report.

It’s useful credit practice to continuously keep two or three active charge cards. You will improve your credit score. Paying off all of your cards monthly helps even more. Keep in mind though that if you have more cards than three, this could have a negative effect on your credit score.

Credit Card

TIP! Just as you want to avoid paying late fees, you want to avoid that over the limit fee as well. Both fees are steep, and going past the limit will affect both your pocketbook and your credit score.

Be sure to check your credit card’s terms to see if it charges an annual fee to use the card. You want to make sure that you don’t pay a premium for the credit card. Annual fees for high end cards can be very high depending on how exclusive they are. If you don’t need an exclusive card, keep this in mind and avoid the fees.

Be aware of the interest rate that you are being charged. If you are applying for a new credit card, make sure that you are aware of what the rate is on that card. If you aren’t aware of the rate, it could turn out to be much higher than you initially thought. If you are paying a high interest rate, you might not ever be able to pay the bill completely every month.

TIP! If your financial circumstances become more difficult, speak with your card issuer. If you are at risk of being unable to make payments in a timely manner, the credit card issuer will usually try to arrange a payment plan that you can stick to.

Keep a close eye on your balance. It is also important to know your credit limits. The fees will really add up quickly if you spend over your limit. Exceeding your credit card limit can impede your ability to pay off your balance quickly.

Credit Card

TIP! Keep a close eye on your balance. Be sure that you’re aware of what kind of limits are on your credit card account.

It is important to understand all credit terms before using your card. When you make your first purchase on a new credit card, the credit card company will usually consider your purchase as your acceptance to their terms. The print on the agreement may be small, but it is important to read it carefully.

Before getting a credit card, make certain that you completely understand the policies you are agreeing to. If you don’t fully read the terms and conditions, you could be shocked by the interest rate, the fees and the payment schedule of your credit card. The credit card policy must be understood if you want to avoid future difficulty.

TIP! Always make any credit card payments on time. You should always be aware of when any credit card bills are due so that you do not incur any fees.

A lot of experts agree that a credit card’s maximum limit shouldn’t go above 75% of the amount of money you make every month. If you owe more than that, you need to work hard to pay it off quickly. This becomes critical because the interest charges will continue to push your balances higher and higher.

Never close the account. Although you may think this will improve your credit, it could actually hurt your credit score. This is because you are actually subtracting from the total amount of credit you have, which then lowers the ratio between that and what you owe.

TIP! Many credit cards offer loyalty programs. As long as you are in the habit of paying with a credit card, be sure to find a program which will reward you for using it.

To give an appearance of zero debt, many choose not to have charge cards. It’s important use one credit card, at least, in order for you to build a credit history. Use the card, and pay it in full every month. If you have no credit, your score is lower and lenders will not know whether you can manage credit.

Always verify your charges and fees to make sure they are accurate instead of simply focusing on interest rates. There are oftentimes charges for service, applications, cash advances and many other unexpected fees.

Credit Card

If you aren’t using a card, it is better to close it. Keeping them open makes it easier for you to be a victim of identity theft. Credit card providers can also charge large annual dormancy fees for unused credit card accounts.

TIP! Avoid using public computers for any credit card purchases. Your credit information may be stored in these computers.

Bank cards can be a very convenient payment option if used properly. From peace of mind and emergency preparedness, to potential rewards and perks, charge cards have the potential to enhance the quality of your financial life. Use the knowledge you gained to manage your credit card, and build good credit.


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