Credit cards can make life easier or completely miserable. It all depends on how you use them. Here are 8 tips on using credit cards wisely. Some of them I learned the hard way and others were passed on to me by friends and family. I hope your experience with credit cards hasn’t been a negative one! Feel free to pass these on to someone who might benefit from them.
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It’s much too tempting to spend more money when you have a high line of credit. When monthly payments are made on time, many credit card companies offer to raise your line of credit; sometimes double the amount it currently is. If you aren’t sure that you can handle this dramatic increase, then call the company and ask them to keep it at the lowest amount of credit possible.
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If you only make a payment for the minimum amount required, it will be very difficult to get the card paid off. The longer you put of paying your credit card in full, the more you’ll end up paying in the end. Interest is charged on any existing debt and this is a monthly occurrence. The sooner you are able to pay off your credit card, the less dough you’ll have to shell out.
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Making everyday purchases with a credit card will cause your credit limit to be reached in a hurry. It’s hard for most people to save their cards for emergency use only. I know how tempting it can be to use it for fun things around the holidays. It’s so easy to go into debt by buying lots of great presents for the family.
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Most companies will offer you a credit card with zero percent interest for a certain amount of time. Be sure to check and see what this low interest rate will go up to after the grace period has passed. The average interest rate offered credit card companies is around 14 to 15 percent. This rate will be significantly higher if you have bad credit, sometimes almost double.
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I constantly get credit card applications in the mail, but thankfully I don’t feel compelled to apply for them all. If you have a high-paying job and a great credit report, then just about any company will accept your application for their credit card. Keeping track of monthly payments to each company is a chore in itself, let alone trying to remember how much you’ve actually racked up in credit card bills.
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Being able to completely pay of the credit card each month is how these plastic monetary forms are supposed to be handled. I have a friend who writes down exactly how much he spends each month and makes a budget for his credit card spending. He knows the top amount he can place on his credit card, in order to still be able to pay it off each month. Talk about managing finances properly! His wife was thoroughly impressed when he explained his credit card tactics to her.
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Missing a monthly payment on the credit card causes a late fee to be added onto the next month’s balance. Making late payments each month can eventually hurt your credit score. When your credit report reflects late or missed payments, outstanding loans, or other financial mishaps, it’s difficult to repair this damage quickly. A bad credit score can keep you from qualifying for the purchase of a new home, car, or low insurance rates.
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The Internet has been around long enough that most websites are able to provide security for customers making online purchases. However, technology has also brought about many ways for hackers to steal personal information via online stores. Well-known sites that have gained a positive reputation through excellent customer satisfaction generally supply their buyers with plenty of security during check-out.
I hope these 8 tips on using credit cards wisely prove useful for you or a friend. Some people find credit cards very hard to live without, while others have never owned on in their life. Do you find it easy to have a credit card in your pocket and only use it when absolutely necessary? Are there any other tips you’d like to add to this list?
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