Consumers need to be informed about how to take care of their financial future and understand the positives and negatives of having credit. Credit cards are really useful, but they might also cause a lot of debt! The following article will help you with some great tips on how to wisely use charge cards.
It’s good credit practice to consistently maintain two or three open charge cards. This can help you to build a credit history and improve your credit score, as long as you are sensible with the use of these cards. If you have more than 3 charge cards however, that might not look right to a lender who looks as your credit report.
To keep your credit score high, make sure to pay your credit card payment by the date it is due. Late payments involve fees and damage your credit. Set up auto payments with your creditors to save money and time.
Keeping two or three credit card accounts open is a sound financial practice. Not only does this increase your credit ranking, but when you pay every month, you also increase your line of credit. But, if you have more than three cards, lenders may not view that favorably.
Interest Rate
Know what interest rate your credit card gets. It’s vital that you know what the interest rate is before signing up for a credit card. You could be charged much more than you originally thought if you are not sure of the rate. You might not have the ability to pay your debts every month if the charges are too high.
Check your balance carefully when your statement arrives. Be sure you know your card’s limit before making purchases. If you pass that limit, you will end up paying more in fees than you know. Exceeding the limit also means taking more time to pay off your balance, increasing the total interest you pay.
Monitor your credit card spending closely to avoid overspending. It’s easy to lose track of your spending, so keep a detailed spreadsheet to track it.
Use your charge cards wisely. Don’t charge more than you can afford to pay back. Before using a credit card, make sure your income will cover the balance on your statement. If you carry a balance, your debt will grow and the total balance will be harder to pay off.
Before you get something online with a credit card, be sure that you can trust the seller. Call the company to be sure they are still in business, and never buy from a store that has no street address listed.
If anyone asks you to give them your credit information or card number over the phone, never give it to them. Many scammers will use this ploy. Only provide your number to businesses you trust, along with your card company if you call about your account. People who contact you cannot be trusted with your numbers. Regardless of who they claim they are, you have no way of verifying it if you did not call them.
If your financial situation takes a turn for the worse, it is important to notify your credit card issuer. If you are at risk of being unable to make payments in a timely manner, the credit card issuer will usually try to arrange a payment plan that you can stick to. This could prevent them from having to report late payments to major reporting agencies.
There are a lot of financial pitfalls waiting out there for the unwary consumer; punitively high interest charged on credit card debt is certainly one of them! It is to be hoped that this article imparted some useful financial information to help you navigate the world of credit.