Is it possible to use credit cards responsibly, or do you feel as though they are only for the fiscally brash? If you believe that it is impossible to use a credit card in a healthy manner, you are mistaken. This article has some great tips on responsible credit usage.
Be safe when giving out your credit card information. If you like to order things online with it, then you have to be sure the website is secure. If you notice charges that you didn’t make, call the customer service number for the credit card company. They can help deactivate your card and make it unusable, until they mail you a new one with a new account number.
You should always try to negotiate the interest rates on your credit cards instead of agreeing to any amount that is always set. If you get a lot of offers in the mail from other companies, you can use them in your negotiations, to try to get a much better deal.
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.
Check your credit report regularly. By law, you are allowed to check your credit score once a year from the three major credit agencies. This may be often enough, if you use credit sparingly and always pay on time. You may want to spend the extra money, and check more often if you carry a lot of credit card debt.
Know the interest rate you are getting. You should completely understand the interest rate prior to signing up for a credit card. If you aren’t aware of the rate, it could turn out to be much higher than you initially thought. If you are paying a high interest rate, you might not ever be able to pay the bill completely every month.
Whenever you can manage it, you should pay the full balance on your credit cards every month. In an ideal world, you would only charge what you could comfortably afford in cash. Making use of the available credit helps to build your credit score, but you will avoid finance charges by paying the balance off every month.
If you have poor credit and want to repair it, consider a pre-paid credit card. This type of credit card can usually be found at your local bank. You can only use the money that you have loaded onto the card, but it is used as a real credit card, with payments and statements. By making regular payments, you will be repairing your credit and raising your credit score.
In order to keep a good credit rating, be sure to pay your bills on time. Avoid interest charges by picking a card that has a grace period. Then you can pay the entire balance that is due each month. If you cannot pay the full amount, pick a card that has the lowest interest rate available.
Carefully monitor all communications from your credit card company, and open everything as soon as possible. Credit card companies can add or change fees, interest rates, and annual fees if they provide you with a written notice of such changes. If you don’t agree with their changes, it’s your decision if you want to cancel your credit card.
Live by a zero balance goal, or if you can’t reach zero balance monthly, then maintain the lowest balances you can. Credit card debt can quickly spiral out of control, so go into your credit relationship with the goal to always pay off your bill every month. This is especially important if your cards have high interest rates that can really rack up over time.
The key to using a credit card correctly lies in proper repayment. Every time that you don’t repay the balance on a credit card account, your bill increases. This means that a $10 purchase can quickly turn into a $20 purchase all due to interest! Learn how to pay it off every month.
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.
Don’t forget the things you learned in this article, and you are well on your way to having a healthier financial life which includes responsible credit use. Each of these tips are very useful on their own, but when used in conjunction, you will find your credit health improving significantly.
