Some people view credit cards suspiciously, as if these pieces of plastic can magically destroy their finances without their consent. The truth is, however, credit cards are only dangerous if you don’t know how to use them properly. Read on to learn how to protect your credit if you are using credit cards.
Know how closing a credit card will affect you before you do it. Many times it leads to lowering your credit score which you do not want. Also, be sure that you keep a few cards open that are responsible for most of your history, credit wise.
Decide what rewards you would like to receive for using your credit card. There are many options for rewards that are offered by credit card companies to entice you to applying for their card. Some offer miles that can be used to purchase airline tickets. Others give you an annual check. Choose a card that offers a reward that is right for you.
Be sure that you only use your credit card on a secure server, when making purchases online to keep your credit safe. When you input your credit card information on servers that are not secure, you are allowing any hacker to access your information. To be safe, be sure that the website starts with the “https” in its url.
It is important that you have a good credit score if you desire a good credit card. Your credit score is directly proportional to the level of credit you will be offered by card companies. The best credit cards are usually reserved for those with high credit scores.
Always read emails or letters from your credit card company immediately. Credit cards companies can change their policies, fees and interest rates so long as you receive a written notice that they are doing so. Read the correspondence carefully to check for any unwanted changes. You have the right to cancel your card if you don’t like these changes!
Be sure to get assistance, if you’re in over your head with your credit cards. Try contacting Consumer Credit Counseling Service. This nonprofit organization offers many low, or no cost services, to those who need a repayment plan in place to take care of their debt, and improve their overall credit.
Never let anyone else use a credit card that is in your name. Even if you’re talking about a relative, you can never trust someone enough to deal with the potential consequences. Lending out a credit card can have negative results if someone charges over the limit and can hurt your credit score.
Fully read the disclosure statement before you accept a credit card. This statement explains the terms of use for that card, including any associated interest rates and late fees. By reading the statement, you can understand the card you are choosing, in order to make effective decisions when it comes to paying it off.
Find out if the interest rate on a new card is the regular rate, or if it is offered as part of a promotion. Many people do not realize that the rate that they see at first is promotional, and that the real interest rate may be a significant amount more than that.
Your oldest credit card is the one that affects your credit report the most. Do not close this account unless the cost of keeping it open is too high. If you are paying an annual fee, ridiculous interest rates, or something similar, then close the account. Otherwise, keep that one open, as it can be the most beneficial to your credit score.
If you can, stay away from cards that have annual fees. Typically, cards without annual fees are available to those with solid credit histories. An annual fee can quickly cancel out any rewards a card offers. Therefore, it is important to weigh the pros and cons before applying for a credit card with an annual fee. Issuers obviously will not advertise the fees; you will have to go over the fine print to find them. Use a magnifying glass on all those terms if you need one. Then consider if any fees charged outweigh the cards benefits. Normally, they don’t.
Place credit cards behind debit cards in wallets in order to prevent accidental credit charges. If you do this, you will use your debit card even when you aren’t paying attention, rather than your credit card.
As you can see, credit cards don’t have any special power to harm your finances, and in fact, using them appropriately can help your credit score. After reading this article, you should have a better idea of how to use credit cards appropriately. If you need a refresher, reread this article to remind yourself of the good credit card habits that you want to develop.
