Credit cards are a ubiquitous part of most people’s financial picture. While they can certainly be extremely useful, they can also pose serious risk, if not used properly. Let the ideas in this article play a major role in your daily financial decisions, and you will be on your way to building a strong financial foundation.
Do not use your credit card to make purchases or everyday items like milk, eggs, gas and chewing gum. Doing this can quickly become a habit and you can end up racking your debts up quite quickly. The best thing to do is to use your debit card and save the credit card for larger purchases.
Never get rid of an account for a credit card prior to going over what it entails. Many times, closing an account leaves a negative mark on your credit record, and should be avoided, even if you do not plan to ever use the account again. Also, try to keep the cards open that make up the majority of your credit history.
Always report any fraudulent charges that you notice on your credit cards as soon as possible. If you do this, your credit card company will have a good chance of tracking down the thief. It’s also the most efficient way to limit the liability you face for the incurred charges. You can report the majority of fraudulent charges with a simple email or phone call to the credit card company.
Do not apply for a new credit card before understanding all the fees and costs associated with its use, regardless of the bonuses it may provide. Make certain you completely understand fine print in the terms and conditions though, because a lot of the credit card companies have very particular terms for you to qualify for before you get the bonus. Many times, the creditor will require you to charge a particular amount in a set time to receive the bonus.
Be sure you sign your cards as soon as your receive them. A lot of places need a signature so they can match it to your card, which makes it safer to buy things.
Instead of just blindly applying for cards, hoping for approval, and letting credit card companies decide your terms for you, know what you are in for. One way to effectively do this is, to get a free copy of your credit report. This will help you know a ballpark idea of what cards you might be approved for, and what your terms might look like.
It is important for people not to purchase items that they cannot afford with credit cards. Just because an item is within your credit card limit, does not mean you can afford it. Make sure anything you buy with your card can be paid off by the end of the month.
If you have a credit card, add it into your monthly budget. Budget a specific amount that you are financially able to put on the card each month, and then pay that amount off at the end of the month. Try not to let your credit card balance ever get above that amount. This is a great way to always pay your credit cards off in full, allowing you to build a great credit score.
Only order a credit card by mail if you have a mailbox that locks. A lot of people who have stolen credit cards in the past did so with ease, because they’ve done it on mailboxes that aren’t locked.
As a general rule, you should avoid applying for any credit cards that come with any type of free offer. More often than not, anything that you get free with credit card applications will always come with some sort of catch or hidden costs that you are sure to regret later on down the road.
Remember that you must pay back what you have charged on your credit cards. This is only a loan, and in many cases, it is a high interest loan. Carefully consider your purchases prior to charging them, to be sure that you will have the money to pay them off.
Always avoid closing an account. It might seem like this would be good on your credit rating, but it can actually make things worse. The reason behind this is that you will be reducing the total mount of credit you are given while still owing the same amount. The ratio between the two will look worse as a result.
Once you acquire a credit card, you should work to keep it active for the longest period possible. You should refrain from switching to another credit card account unless it is unavoidable situation. This can have a direct effect on your credit score since length of history with a creditor is a factor in the scoring process. Keeping accounts open helps credit.
Be sure to go over the laws on credit cards that have been passed recently. Credit card companies cannot increase your interest rate without giving you notice first. The companies are also not allowed to bill in a double-cycle. Take the time to learn the governing credit card laws. There have been two major changes in the laws. You should read up on them to familiarize yourself.
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.
Transferring a credit card balance from a high interest credit card to a card where the rate is less, can save you money every month. Credit card companies offer special introductory rates to attract new business to their credit cards. If you take advantage of one of these offers, make sure that you understand the amount of time that the introductory rate offer lasts.
Just about everyone has used a credit card at some point in their life. The impact that this fact has had on an individual’s overall financial picture, likely depends on the manner in which they utilized this financial tool. By using the tips in this piece, it is possible to maximize the positive that credit cards represent and minimize their danger.