If you have never owned a credit card before, you may not be aware of the advantages it contains. A credit card can be used as a alternative form of payment in many locations, even online. In addition to this, it can be used to build a person’s credit score. If these advantages appeal to you, then continue reading for more information on credit cards and how to use them.
Do not use your credit cards to make emergency purchases. Many people believe that this is the best use of credit cards, but the best use is actually for things that you purchase on a regular basis, like groceries. The key is, to only charge things that you will be able to pay back in a timely manner.
Ensure you understand how closing an account will affect your credit score. Sometimes, closing a card can have a negative impact on your credit scoring and this is something nobody wants. Also, try to keep the cards open that make up the majority of your credit history.
Don’t consider opening a store credit card unless you plan to make purchases at the store on a regular basis. If a retail store puts out an inquiry to the credit bureaus to check about your qualification status for their card, it will impact your score. A lot of inquiries from stores can lower your credit rating.
Always make sure there is not a yearly fee attached to any credit card that offers rewards or perks. The fees for premium credit cards can range from a small amount to a very large amount depending on how many cards the company issues. If you don’t have to have a card that’s exclusive, avoid fees and keep that in mind.
Don’t open too many credit card accounts. A single person only needs two or three in his or her name, in order to get a good credit established. More credit cards than this, could actually do more damage than good to your score. Also, having multiple accounts is harder to keep track of and harder to remember to pay on time.
Look into whether a balance transfer will benefit you. Yes, balance transfers can be very tempting. The rates and deferred interest often offered by credit card companies are typically substantial. But if it is a large sum of money you are considering transferring, then the high interest rate normally tacked onto the back end of the transfer may mean that you actually pay more over time than if you had kept your balance where it was. Do the math before jumping in.
Too many people erroneously believe that it is a good idea not to have any credit cards at all. It’s important to have one credit card, at least, in order to build credit. Make use of it each month, as well as paying in full each month. By not having any credit, a lower score occurs and that means other people may not offer you credit because they aren’t sure you know about debt.
When deciding which credit card is best for you, be sure to take its reward program into consideration. For example, some companies may offer travel assistance or roadside protection, which could come in handy at some point. Inquire about the details of the reward program prior to committing to a card.
With your credit cards 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.
Be careful when you are signing up with secured credit card companies because a lot of them charge high fees in exchange for issuing you a card. If you have to get this type of card, then you should shop around to make sure that you are paying the lowest fees.
Always try to find a credit card that does not charge an annual fee. Some credit cards that charge annual fees try to entice users with bonus offers or cash back incentives. While these types of rewards might be tempting, really think about whether or not they are worth the annual fee you will be forced to pay. In many cases, they are not.
Think about whether you are disciplined enough to handle the responsibility of credit cards before applying for them. Some are tempted too much and overspend using credit. These people should think twice before applying for a credit card. When they choose to open an account, they are opening themselves up to a devastating financial future.
Be absolutely sure that your child is prepared to handle a credit card. While it might be difficult to consider your child too immature for a credit card, it will likely lead to much better spending habits down the road.
It’s good to tell your card company before using a card for something unusual. Making exceptionally large purchases and traveling internationally are examples of situations where giving advance notice is smart. This makes it less likely your credit card company will suspect identity theft and suspend your account.
You should not necessarily hesitate to pay one credit card with a different one, as long as one has far better terms than the other. There may be benefits even if you find the interest rates on the two cards are fairly close, such as frequent flyer miles or rewards points. Just be certain you do the proper calculation first.
Now that you are aware of how beneficial a credit card can be, it’s time to start looking at some credit cards. Take the information from this article and put it to good use, so that you can apply for a credit card and start making purchases.
