If you use them wisely, credit cards can give you all sorts of benefits, from a good deal on a vacation package to simple peace of mind. People who are not wise will charge the vacation to their credit card and then stress out later about how they are going to pay for that. To alleviate the chances of getting in over your head, read the tips contained in this article.
Keeping two or three credit card accounts open is a sound financial practice. Having two or three cards will help you to improve your credit rating. If you have more than 3 bank cards however, that might not look right to a lender who looks as your credit report.
Read the small print. Any pre-approved offers or people saying they will help you to get a card are most often worthy of your suspicion and further inquiry before signing up. It’s important to know what your interest rate is and will be in the future. Inquire about grace periods for payments and if there are any additional fees involved.
In order to maintain and improve your credit score, it’s best to make card payments before the day they’re due. Late payments can damage your credit score and often involve costly fees. If you set your accounts on an auto pay schedule, you will save time, and possibly money, when you pay your bill.
If you only pay the minimum amount each month on your credit card, only the credit card company benefits. The monthly minimums are deliberately designed to be so low that you will be paying for years in in order to pay off your balance. In the meantime, the credit card company will be collecting inordinate amounts of interest from you. Always pay more than just the minimum amount required. Don’t incur expensive interest costs over time.
Be aware of the rate of interest you are provided. 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 are unsure, over time you might pay much more than what items actually cost. It’s always a good idea to pay off your credit card in full every month, but this may be impossible if you are paying more than you expected.
Set a fixed budget you can stick with. Just because your credit card company has allowed you a certain amount of credit doesn’t mean you have to spend it all. Be aware of what you are capable of paying and stay within that limit for healthier finances and to avoid high interest payments.
Do not use credit cards to buy items that you cannot afford. Charge cards should not be used to buy things that you want, but don’t have the money to pay for. You will end up being charged lots of interest and you may be unable to keep up with the monthly repayments on your credit card. Go home to mull it over for a couple of days and then reach a rational decision. If you still want to purchase it, the store usually has in-house financing that will have lower interest rates.
Check out the integrity of your seller before using your credit card for online purchases. Call the company to talk with representatives and never buy from a merchant that does not provide a physical address.
Never give your card number out over the phone. This is a very common tactic by scammers. Be sure to give you number only to businesses that you trust. Do not give them to people who call you. Although someone may say they are from a certain company, there is honestly no way to tell if they are being truthful.
Many experts believe that the limits on your credit cards should not be above 75% of your total monthly salary. Try to pay off your credit card immediately if your limit is more than your monthly income. Your interest will quickly become unpayable.
Make sure to always carefully review any credit card statements you receive. Look for inaccurate charges as well as charges you didn’t make in the first place. If you notice anything wrong, contact the credit card company as soon as possible. That can make sure you don’t pay too much, and it can also help your credit score stay where it is as well.
Try avoiding companies which charge an annual fee. People who have a healthy credit score are more likely to get these types of cards. Fees can quickly eliminate the perks associated with any offers that accompany the card. Think about this carefully and do the calculations. Any fees for a card are more than likely typed in fine print. Take the time to really read the details. Take a look at whether the fees outstrip the probable benefits. As a general rule they won’t.
A credit card that doesn’t offer perks or rewards can still benefit you. People who don’t use their cards properly may be gratified in the short term but suffer long-term stress over bills. Use the things that you’ve learned from this guide to make wise decisions on spending money using your charge cards.