Credit cards have the capacity to serve as valuable financial tools for anyone willing to use them in a responsible, disciplined manner. Knowledge is essential, however, when it comes to choosing the best cards and using them in the most effective way possible. Use the ideas in this piece, as part of your daily life and you will be well on your way to becoming a smart credit consumer.
Before you choose a credit card company, be sure that you compare interest rates. There is no standard when it comes to interest rates, even when it is based on your credit. Every company uses a different formula to figure what interest rate to charge. Be sure that you compare rates, to ensure that you get the best deal possible.
When you are unable to pay off one of your credit cards, then the best policy is to contact the credit card company. Letting it just go to collections is bad for your credit score. You will find that most companies will let you pay it off in smaller amounts, as long as you don’t keep avoiding 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.
You should contact your creditor, if you know that you will not be able to pay your monthly bill on time. Many people do not let their credit card company know and end up paying very large fees. Some creditors will work with you, if you let them know the situation ahead of time and they may even end up waiving any late fees.
Know what interest rate your card has. Before you decide whether or not a credit card is right for you, you have to understand the interest rates that will be involved. If you do not know, you could end up paying much more than the original price. If you’re paying more, you may not be able to afford to pay off the debt each month.
Credit cards should always be kept below a specific amount. This total depends on the amount of income your family has, but most experts agree that you should not be using more than ten percent of your cards total at any time. This helps insure you don’t get in over your head.
Carefully read through all the conditions and terms of your card agreement before using the card. In most cases, using the credit card for the first time means you agree with all the terms. You should literally read the fine print.
Unless there is a lock located on your mailbox, do not have credit cards sent by mail. Many scammers have admitted to stealing cards that were in mailboxes with no locks on them.
If you are determined to stop using credit cards, cutting them up is not necessarily the best way to do it. Just because the card is gone doesn’t mean the account is no longer open. If you get desperate, you may ask for a new card to use on that account, and get trapped in the same cycle of charging you wanted to get out of in the first place!
Many companies advertise that you can transfer balances over to them and carry a lower interest rate. This sounds appealing, but you need to carefully consider your options. Think about it. If a company consolidates a higher amount of money onto one card and then the interest rate spikes, you are going to have a hard time making that payment. Know all the terms and conditions, and be careful.
Check into all fees and charges that go along with a card for which you are thinking of applying for, not just the interest rate and APR. The card may come with additional fees and charges that make the card unbearable.
Shred old credit card receipts and statements. You can easily purchase an inexpensive home office shredder to handle this task. Those receipts and statements, often contain your credit card number, and if a dumpster diver happened to get hold of that number, they could use your card without your knowledge.
Shop different credit cards before applying to find out the perks each offers. Some offer roadside assistance, while others offer airline perks, like free baggage check. Some will also offer buyer protections, above and beyond what a store offers. Depending on your buying habits, one credit card may offer perks that fit you best.
Any credit card you don’t use should be cancelled. You are making yourself a likely victim of fraud if you choose to keep them open. You could also be charged annual fees for keeping a credit card account open that you no longer need or use.
Remember to occasionally use the credit cards that you want to keep. Inactive accounts are often closed by creditors. One way to prevent this problem is to make a purchase with your most desirable credit cards on a regular basis. It is also important to pay your accounts in full to remain debt-free.
Although you may be tempted to make all your purchases with your credit card, it is often better to use cash for small purchases. Many vendors have a minimum charge for credit card users, which means you’ll be stuck looking for extra things to buy at the last minute. Keep credit expenditures above $10.
Most people would agree that credit cards have a useful role to play in everyday personal finances. The important thing to understand is that along with the convenience they can offer, comes the necessity of adhering to strict principles of appropriate usage. The tips and guidance contained in this article can provide an important framework for the wise management of your personal finances.
