Some people fear having credit cards because of potential problems that can occur. However, there is no reason for you to be scared about owning a credit card. Credit cards have the potential to be very useful when you want to make a purchase, but are reluctant to do it with cash. This article presents some tips to follow to ensure you use your credit wisely.
Consumers should shop around for credit cards before settling on one. Many different credit cards are available, each offering a different interest rate, annual fee, and some, even offering bonus features. By shopping around, an individual can find one that best meets their needs. They can also get the best deal when it comes to using their credit card.
Try your best to stay within 30 percent of the credit limit that is set on your card. Part of your credit score is made up of assessing the amount of debt that you have. By staying far under your limit, you will help your rating and make sure it does not start to dip.
You need to be careful not to overspend, so you should track every purchase you make with your credit card and keep a running total. Noting down your credit card expenditures on paper or a spreadsheet will make you less likely to start spending money you cannot afford to repay.
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.
Pay your minimum payment on time each month, to avoid more fees. If you can afford to, pay more than the minimum payment so that you can reduce the interest fees. Just be sure to pay the minimum amount before the due date.
You may want to find a co-signer if you don’t have enough credit to get your own card. You can have a friend, parent, sibling or anyone else that is willing to help you and has an established line of credit. Of course, they are putting themselves on the line, by becoming responsible for your credit. Many have found this to be a great help in beginning the process of building credit.
Carefully read through all the conditions and terms of your card agreement before using the card. A majority of companies consider your first use of the card to be an acceptance of its terms and conditions. Even though the agreement’s print is tiny, read it as carefully as you can.
A great way to save money on credit cards is to spend the time necessary to comparison shop for cards that offer the most advantageous terms. If you have a decent credit history, it is highly likely that you can obtain cards with no annual fee, low interest rates and perhaps, even incentives such as airline miles.
Those with imperfect credit may want to think about getting a secured card. They are simply credit cards for which a deposit is necessary to guarantee payment. In actuality, you simply use your own funds and pay interest in order to hold the card. This is not a great situation to be in, but it can be a way to dig yourself out of a credit hole. Stick with companies that have a good reputation when you are getting a secured card. After some time the company may present you with an unsecured credit card offer later which will help improve your credit score greatly.
Many people, especially when they are younger, feel like credit cards are a type of free money. The fact is, they are exactly the opposite, paid money. Remember, every time you use your credit card, you are basically taking out a micro-loan with incredibly high interest. Never forget that you must repay this loan.
Make a spending plan. When carrying a credit card on you and shopping without a plan, you have a higher chance of impulse buying or overspending. To avoid this, try planning out your shopping trips. Make lists of what you plan to buy, then decide on a charging limit. This plan will keep on track and help you resist splurging.
Department store cards are tempting, but when trying to improve your credit and keep a great score, you need to keep in mind that you don’t want a credit card for everything. Department store cards can only be used at that specific store. It is their way of getting you to spend more money at that specific location. Get a card that you can use anywhere.
The credit card tips in the article above should help to alleviate credit card fears. When used properly, credit cards are a great convenience and a useful tool for improving your financial life. Just use the information you’ve learned here and your fear of credit cards will be a thing of the past.
