Having a credit card makes it easier for people to build good credit histories and take care of their finances. You should understand the advantages and pitfalls of having access to easy credit. Below, you will find some great tips on using credit cards and using them wisely.
You should try to have at least two open cards or possibly three open credit accounts. This will increase your credit score over time, especially if you don’t carry a balance from month to month. That said, if you go all out and open four or more cards, it may look bad to lenders when they evaluate your credit reports.
Always review the fine print on your credit card disclosures. If you see ‘pre-approved’ or someone offers a card ‘on the spot’, be sure to know what you are getting into prior to making a decision. Know what the real interest rate is, if it goes up after the first year and how much time they allow for payment of it. Remember to check out any grace periods and finance charges involved, too.
When it comes to premium bank cards, find out if an annual fee is involved to make sure that you do not pay too much for the card. The exclusive credit cards, like the platinum or black cards, are known to charge it’s customers an annual fee from $100 to $1,000 a year. If you don’t need an exclusive card, keep this in mind and avoid the fees.
Keep a close eye on your credit balance. Know what your limit is and how much you’re spending, you don’t want any surprises. The fees will really add up quickly if you spend over your limit. It will take forever to pay down your balance if you continue to go over your card’s limit.
Plan a spending budget that you will be able to stick to. Even though you have a credit card limit your company has provided you, you shouldn’t max it out. Only spend what you can afford so that you can pay the bill off at the end of the month.
Pay your entire balance every month if you can. The use of a credit card offers a lot of convenience, but best used only if the balance is paid off each cycle. Using the credit is good for your credit score, and paying off the balance ensures that you will not be paying finance charges.
As was stated in the beginning of this article, credit cards can benefit individual’s as they work to build their credit and take charge of their money. Fully understanding the terms and conditions of various bank cards is the best way to make an educated choice when selecting a credit card provider. Once you understand the fundamentals of a credit card, then you can make better informed decisions.