Credit cards are useful for building credit and managing finances. Helping your credit score is just one of the many benefits of a properly handled credit card. The piece that follows includes credit card fundamentals aimed at helping consumers make smart decisions about their finances.
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.
When you are getting your first credit card, or any card for that matter, make sure you pay close attention to the payment schedule, interest rate, and all terms and conditions. Many people neglect to read this information, but it is definitely to your benefit if you take the time to read through it.
Practice sound financial management by only charging purchases that you know you will be able to pay off. Credit cards can be a quick and dangerous way to rack up large amounts of debt that you may not be able to pay off. Don’t use them to live off of, if you are unable to come up with the funds to do so.
Do not accept the first credit card offer that you receive, regardless of how good it sounds. While you may be tempted to jump on an offer, you do not want to take any chances that you will end up signing up for a card and then, seeing a better deal shortly after from another company.
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.
Take advantage of the freebies offered by your credit card company. Many companies have some sort of cash back or points system that is attached to the card you own. When you use these things, you can receive cash or merchandise, just for using your card. If your card does not offer an incentive like this, call your credit card company and ask if it can be added.
When developing a PIN or a password, make it one that is hard to make any sort of guess about. You don’t want anyone who can go through your trash to easily figure out your code, so avoiding things like birthdays, middle names and your kids’ names is definitely wise.
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.
The credit card that you use to make purchases is very important and you should try to use one that has a very small limit. This is good because it will limit the amount of funds that a thief will have access to.
Do your research prior to applying for a credit card. Certain companies charge a higher annual fee than others. Compare the rates of many different companies to make sure you get the one with the lowest fee. Also, do not forget to find out if the APR rate is fixed or variable.
It is a good rule of thumb to have two major credit cards, long-standing, and with low balances reflected on your credit report. You do not want to have a wallet full of credit cards, no matter how good you may be keeping track of everything. While you may be handling yourself well, too many credit cards equals a lower credit score.
Check old credit card accounts and try closing any that aren’t in use. If you close them, that will stop anyone from making unauthorized charges with them. You can close accounts you don’t use, even if they carry a balance. You can simply keep making payments until you get rid of the outstanding balance.
While it might be tempting to use your credit card to pay for everything, when it comes to small purchases, it’s better to leave the plastic in your wallet. You may have to pick up extra items you don’t need in order to meet the vendor’s minimum charge requirement for using your credit card. Purchasing $10 or more is recommended, if you’re going to buy something with a credit card.
Now it is probably clear that credit card usage can help people as they work on building up their credit history and taking control of their money. Knowing the differences between cards is key, because it facilitates wiser choices. The information you’ve learned here should give you a firm understanding of credit cards and how they can influence your financial situation.