Credit cards are useful for building credit and managing finances. It is necessary to gain an understanding of credit cards, however, in order to use them wisely. Below, you will find some great information about credit cards in general, from the types of rewards you could receive to different ways to keep up with your payments.
When it comes to premium charge cards, find out if an annual fee is involved to make sure that you do not pay too much for the card. Annual fees for premium charge cards can range in the hundred’s or thousand’s of dollars, depending on the card. Avoid paying these fees by refraining from signing up for exclusive bank cards if you don’t really need them.
You know that paying your credit card bill late will incur a penalty, but you should remember that there is a penalty for running your balance over your credit limit, too. Incurring debts beyond your credit limit can have negative repercussions on your credit score as well as expose you to expensive penalty fees. Don’t pass your credit limit or you will suffer.
One way to cut down on monthly payments is to ask for a lower interest rate from the companies that have extended credit to you. If you have a significant history with a credit card company, and have paid your payments in a timely manner, they may be willing to offer you a lower rate. A single phone call can get you a better interest rate and help you to save a lot of money.
Never close the account. Although it could seem like a smart thing to do for improving your credit score, closing accounts could actually harm your score. When you close an account, your available credit is decreased and the ratio between it and what is owed decreases.
When looking for secured cards, do not get prepaid cards. This is because they are classified as debit cards, so they will do nothing to help your credit score improve. Many prepaid cards charge extra fees and they are really just a checking account. Get a proper secured credit card by parting with a few hundred bucks for the deposit. These proper secured charge cards will help you to improve your credit rating, as they are reported to the major credit bureaus.
If you have several bank cards, try to pay at least one in full every month. Even if you are carrying significant debt on other cards, maintaining an active card that you pay in full every month will help you build a better credit history.
Don’t carry more charge cards than you need. While you might have multiple bank cards, only carry the ones that are used most often. These will usually include a daily charge card and a gas card. By keeping only these regular use cards with you, you are protecting the rest of the cards from unforeseen circumstances.
If possible, avoid cards with annual fees. Usually, no annual fees cards are offered to those with better credit scores. Most often, such fees counteract the perks a card may have. Do the calculations. Credit card issuers do not tout the annual fees; they are usually found in the fine print. Get your glasses out for this. Make sure the cost and fees are not more expensive than the perks. Usually they aren’t worth it.
If you have made improvements or growth in your credit standing, ask your credit card supplier to lower your annual percentage rate. In certain circumstances they will. You will save each month in which you have a balance.
When you have lost your credit card, contact the institution who provided the card right away. There is a certain amount that you can be responsible for if the thief places charges on the card before you call your credit card company to report it. Any charges accrued after you have reported the card as missing cannot be on-charged to you by the card provider.
Do not try to use a credit card to pay off credit card bills. Some people receive money orders that act as cash advances on their bank cards. They sometimes think these money orders are just there to let them skip a month of payments. However, the interest rates and fees involved with this supposed trick is really just creating an even bigger emergency disaster the next month.
If one of your credit cards has better fees or interest rates than the others, use it to pay off the less desirable cards. Even if interest rates are similar, other cards might give perks or points towards airline tickets. Just make sure you do the math on paper before transferring any balances.
Following the tips above, an individual can benefit while trying to build credit and manage their finances. Fully understanding the terms and conditions of various credit cards is the best way to make an educated choice when selecting a credit card provider. There are many benefits to knowing the basics of charge cards, which help consumers make wise choices.