If used the right way, charge cards can garner some fantastic perks from the points you earn, from a good deal on a vacation package to simple peace of mind. Other people who fail to use charge cards may charge expensive vacations and be faced will a stressful bill later. Keep reading to learn how you can do to have and maintain a good charge cards.
Many people wonder if it is better to have one credit card or many. For most people, it is best to have two or three credit cards open. Not only does this increase your credit ranking, but when you pay every month, you also increase your line of credit. However, if you do open more than 3 accounts, it will not be a positive for prospective lenders.
Never charge items on credit card for purchases that are beyond your means. While it is fine to use them for items you may afford later, it is not a good idea to purchase something you will have trouble paying down the line.
Credit card companies set minimum payment and hope you as they can. Always pay as much as possible in excess of the minimum amount required. Avoid paying interest fees over the long run.
You surely wish to steer clear of late charges as well as over limit fees. These fees cost you both money and points on your credit score. Keep an eye on your balance so it does not exceed your credit limit.
A cosigner can help you obtain a good way to get your first credit card if you have yet to establish credit. Anyone with established credit can be your co-signer. They are required to state their willingness to assume responsibility for outstanding balances if you do not pay it. This is one method that is effective in helping individuals to obtain your first card and start building credit.
Do not lend other people your credit card for any circumstance. Even if a close friend needs to use one, it is never a good decision to lend it to anyone. It may lead to large fees if your friend should put more on the card than you had authorized them to.
A lot of experts agree that a credit card’s maximum limit shouldn’t go above 75% of the amount of money you make every month. If you have credit limits that are more than you make every month, you need to start paying off that debt right away. This is because the interest you are paying will quickly snowball out of control.
Credit Score
Keep yourself updated on your credit score. Most charge cards consider 700 the cut off limit for determining a good credit score to be anything above 700. Make good use of your credit to maintain this level, and maintain it once you get there. When you have a 700 score or higher, you will get the best card offers with rates that are the lowest.
Once you are the owner of a secured card, the company may offer an unsecured card once you have proven yourself. You may also find that you start receiving mail offers for credit cards. Take the time to re-evaluate your personal financial situation as you go into the decision making mode.
Avoid prepaid cards at all costs when you are looking for cards. These are typically debit cards so they don’t report to any of the credit bureaus. A lot of them charge additional fees and are basically no more than a checking account. Put down a deposit instead, improving your score.
Some fees that you may overlook include the annual fee, cash advance fees or service charges, which may make you think twice about having the card.
Go through all your credit cards and see if there aren’t any old accounts you’d be willing to close. Closing accounts that are old prevents them from getting used in a fraudulent manner. You can close accounts that you don’t want anymore, even if you still have a balance, too. You can pay keep paying off the card’s balance until there is nothing left to repay.
Don’t lie about your income to get a higher limit bank cards. Some credit issuers never verify income, which may result in you charging more than you can afford to pay back.
Credit Card
It is smart to contact your credit company before using the card for something out of the ordinary. Making large purchases and international traveling are examples of scenarios where you need to give them advance notice. This can keep your company from raising the identity theft alarm and shutting off your card.
If you have a secured credit card, you may find it easier to get a credit card that is unsecured once you have proven your ability to handle credit well. You will probably also find that you start receiving mail offers in your mailbox. This is the moment you must make important decisions about your charge cards needs.
You should close all credit card accounts that are never used. Keeping these open makes you to become a victim to identity theft. You also may end up having to pay annual fees on something that you do not use.
Be wary of cards with zero percent teaser rates. Although you may be tempted to take such an offer, keep in mind that the interest rate and balance will skyrocket once the introductory period ends. Always know what the balance is of any credit card that you plan to use.
Even cards which don’t offer rewards can still help you. As long as you use your charge cards responsibly you will have no problems. If you spend recklessly on your charge cards, however, you could find yourself stressed out due to huge credit card bills. Use the advice in this article to make wise choices and avoid financial stress.