When people think of bank cards, they think of spending dangers and ridiculous interest rates. Having said that, if you use credit cards properly, they can also provide you with certain benefits, such as conveniences, peace of mind, and even certain rewards. Read on to learn how you can use credit cards in a positive manner.
The reason companies have low minimum payments is so they can charge you interest on everything on top of that. Always make more than your card’s minimum payment. Minimize the amount of interest you end up paying.
Make your credit card’s pin code difficult to guess correctly. Never use your middle name, one of your children’s names or dates of birth as a password because the information is easily obtained by someone who sets their mind to it.
Keep a current list of credit card numbers and company contacts. Keep your list in a safe place that is separate from your cards. This list is going to help you if you ever get robbed and they get stolen or if you lose them somewhere along the way.
Lots of people think that not having charge cards gives them an edge. You should always have at least one card so you can establish credit. Use the card for a few purchases that you can afford to pay off quickly. If you do not have a history of credit usage, your credit score will actually be lower and potential lenders will not have any way to see if you can handle credit.
Keep credit card accounts open for as long as possible when you open one. You should not switch credit accounts unless you find it completely unavoidable. The length of your account history with an individual creditor is factored into your credit score. You must keep an account open to build credit.
If you can, do not use your credit card at the grocery store or a restaurant. They take longer to appear on a statement, and you may not know your real available balance. Because of this, you may not know your true account balance.
It is important that you understand all the new laws governing bank cards. Credit card companies cannot increase your interest rate without giving you notice first. You also cannot be billed twice in one cycle. Research the relevant laws. To find out more, look for information on the CARD and Fair Credit Billing Acts.
Track exactly how much you spend each month via your credit card. Remember that impulse purchasing can increase your balance rapidly. If you don’t keep track of how much you’re spending, you may find that you can’t afford to pay off your bill when it comes.
Always be sure to carefully look over credit card statements. Try to identify problems with the charges for which you know you are responsible, and look for entries indicating purchases that you know you never made. Always inform your issuer of problems as soon as possible. This will help you to avoid paying more than you should, and this may help with your credit score as well.
Do not tell other people of the number of your credit card. Often times, people ask this information through the internet or through the phone. Do not do this if you do not know the company you’re dealing with. When someone calls you, be very wary of giving out your credit card number. You can’t be sure they are who they say they are. Scams and frauds abound and they will be more than happy to get their hands on the numbers associated with your charge cards. Therefore, it is important to protect yourself and remain diligent.
It is a bad idea to try to get a credit card with a higher spending limit by falsifying your income on the application. If the company does not confirm your income, the results may be a limit that is way too high for your needs, causing you to spend too much money, and getting into huge debt.
When used carefully, bank cards are very beneficial. From peace of mind and emergency preparedness, to potential rewards and perks, credit cards have the potential to enhance the quality of your financial life. Use the knowledge you gained to manage your credit card, and build good credit.