The wise person who learns becomes wiser yet in credit card management
It is never a bad idea to take good advice, particularly when credit cards are involved. The article below discusses some of the best ways to do credit card management and avoid pitfalls. It is much easier to get a credit card than it is to use it wisely, so many people end up in financial trouble.
If you cannot afford to pay cash for something, think twice about charging it on your credit card. Before purchasing any expensive items, consider how long it will take for you to pay it off in full.
Timeliness is godliness
To retain a favorable credit score, be sure to make your payment for your credit card by the due date. Your credit score can suffer if your payments are late, and hefty fees are frequently imposed. You can avoid being late by putting your credit card payments on an automatic schedule.
Keep a close watch on your balance. You also need to know how close you are to your credit limit. Going over your credit limit will raise your fees and your overall debt. This will make it harder for you to reduce your debt if you continue to exceed your limit.
Money management pays dividends
Create a budget to which you can adhere. Even though you have a credit card limit your company has provided you, you shouldn’t max it out. Know how much you will be able to afford to pay for that month so you can pay it off each month to avoid interest payments.
If you are in the market for a bank issued credit card, look for one that offers a low interest rate. Also avoid paying annual fees. There are so many credit card companies that a card with annual fees is just a waste.
If you use your credit card to make online purchases, be sure the seller is a legitimate one. You should contact whoever runs the site on the phone prior to ordering and don’t use a company that has no real address on their website.
Anything over 700 and you’re laughing (in credit score!)
Watch your own credit score. Good credit is considered to be a credit score over 700. Put your credit to work to maintain that score or to help you reach it. Once your score hits 700 or above, you will get all the best offers of credit with the lowest interest rates.
Everyone has had this experience. “You have been pre-approved for a credit card!” Sometimes you are in the market for one, and often times you may not be. Tear up or shred credit card offers before disposing of them. Many of these offers contain your personal data, making trash a common source of information for identity thieves.
Calibrate your credit limit to your salary
Before you think about receiving a credit card, do a little financial survey first. Typically, you want to keep the limit of your card to less than three quarters of the salary you make every month. If your limit is higher than this amount, it’s best you pay it off immediately. This happens when the interest builds up and it becomes too hard to pay back.
Speak with the company you have your credit card through in order to get your interest rates lowered. There are some companies that will reduce the amount of interest that they charge their customers if they have a long-standing, positive relationship with them. There is no fee to ask, and if it works, you will be saving a lot of money.
Keeping track is a smart move
Track exactly how much you spend each month via your credit card. Notice how quickly impulse spending and small purchases add up. If you don’t keep track of how much you’re spending, you may find that you can’t afford to pay off your bill when it comes.
Research all of the charges that a credit card company may include with an offer. Look beyond interest rates. Look for fees like service charges, cash advance fees, and application fees.
As stated in the beginning of this article, it’s just way too easy to get into financial hot water when using credit cards. With multiple cards, and multiple pricey purchases, you will find yourself in deep trouble. This article should, hopefully, teach you some ways to avoid the trouble that can find you regarding credit cards, so you can be a pro at money management and remain financially healthy.