Credit cards hold tremendous power. Your use of them, proper or otherwise, can mean having breathing room, in case of an emergency, positive impact on your credit scores and history, and the possibility of perks that enhance your lifestyle. Keep reading to learn some great ideas on how to harness the power of credit cards in your life.
When you are unable to pay off one of your credit cards, then the best policy is to contact the credit card company. Letting it just go to collections is bad for your credit score. You will find that most companies will let you pay it off in smaller amounts, as long as you don't keep avoiding them.
Try setting up a monthly, automatic payment for your credit cards, in order to avoid late fees. The amount you need for your payment can be automatically withdrawn from your bank account and it will take the worry out of getting your monthly payment in on time. It can also save money on stamps!
Students who have credit cards, should be particularly careful of what they use it for. Most students do not have a large monthly income, so it is important to spend their money carefully. Charge something on a credit card if, you are totally sure you will be able to pay your bill at the end of the month.
Many companies advertise that you can transfer balances over to them and carry a lower interest rate. This sounds appealing, but you need to carefully consider your options. Think about it. If a company consolidates a higher amount of money onto one card and then the interest rate spikes, you are going to have a hard time making that payment. Know all the terms and conditions, and be careful.
It is good practice to check your credit card transactions with your online account to make sure they match up correctly. You do not want to be charged for something you didn't buy. This is also a great way to check for identity theft or if your card is being used without your knowledge.
Have a list you keep of all your credit card accounts by number as well as the lender's contact numbers. Keep it in a safe spot, such as a safety deposit box, separate from all of your cards. This list is going to help you if you ever get robbed and they get stolen or if you lose them somewhere along the way.
If you do a lot of traveling, use one card for all of your travel expenses. If it is for work, this allows you to easily keep track of deductible expenses, and if it is for personal use, you can quickly add up points towards airline travel, hotel stays or even restaurant bills.
If you have poor credit, you might want to look into secured credit cards. These cards require you to have a balance to use as collateral. Essentially, you're borrowing your money and you pay interest on it. This is not a great situation to be in, but it can be a way to dig yourself out of a credit hole. If you are applying for this type of card, remain with a reputable company. Eventually, the company may offer you a normal, unsecured credit card. That will do even more to improve your score.
When you open a credit card account, try to keep your account open for as long as possible. Avoid closing out one account to open another, unless it is essential. The length of your account history with an individual creditor is factored into your credit score. Building credit is in part about keeping accounts open when possible.
If you cannot pay your entire credit card bill each month, you should definitely keep your available credit limit above 50% after each billing cycle. Having a good credit to debt ratio is an important part of your credit score. Make sure that your credit card is not constantly near its limit.
Prior to applying for a credit card, try to build your credit up at least six months in advance. Then, be sure to take a look at your credit report. By doing this, you are more likely to get approved for the credit card and get a higher credit limit, as well.
If you can't pay your credit card balance in full each month, be sure to make at least double the minimum payment until it is paid off. Paying only the minimum will keep you trapped in escalating interest payments for years. Doubling down on the minimum will help to ensure you get out from the debt as soon as possible. Most importantly, stop using your credit cards for anything but emergencies until the existing debt is paid off.
When getting a credit card, a good rule to follow is to charge only what you know you can pay back. Yes, many companies will require you to pay only a certain minimum amount every month. However, by only paying the minimum amount, the amount you owe will keep adding up.
As was stated earlier, the credit cards in your wallet represent considerable power in your life. They can mean having a fallback cushion in case of emergency, the ability to boost your credit rating and the chance to rack up rewards that make your life easier. Apply what you have learned in this article to maximize your potential benefits.
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