Smart Credit Card Tips You Need To Know
Credit cards can help you to manage your finances, as long as you use them appropriately. However, it can be devastating to your financial management if you misuse them. For this reason, you may have shied away from getting a credit card in the first place. However, you don't need to do this, you just need to learn how to use credit cards properly. Read on for some tips to help you with your credit card use.
An important aspect of smart credit card usage is to pay the entire outstanding balance, each and every month, whenever possible. By keeping your usage percentage low, you will help keep your overall credit score high, as well as, keep a substantial amount of available credit open for use in case of emergencies.
Plan a spending budget that you will be able to stick to. You don't need to max out your credit card just because you can. Only spend what you can afford so that you can pay the bill off at the end of the month.
Take the time to play around with numbers. Before you go out and put a pair of fifty dollar shoes on your credit card, sit with a calculator and figure out the interest costs. It may make you second-think the idea of buying those shoes that you think you need.
Be sure you sign your cards as soon as your receive them. A lot of places need a signature so they can match it to your card, which makes it safer to buy things.
Keep an eye on mailings from your credit card company. While some might be junk mail offering to sell you additional services, or products, some mail is important. Credit card companies must send a mailing, if they are changing the terms on your credit card. Sometimes a change in terms can cost you money. Make sure to read mailings carefully, so you always understand the terms that are governing your credit card use.
Always know what your utilization ratio is on your credit cards. This is the amount of debt that is on the card versus your credit limit. For instance, if the limit on your card is $500 and you have a balance of $250, you are using 50% of your limit. It is recommended to keep your utilization ratio of around 30%, in order to keep your credit rating good.
Don't make a written record of your credit card's PIN or password. You must remember the number so that others can't access your account. If you write it down on a bill or keep it in your financial files, a thief could easily steal this information.
You need to pay more than the minimum payment each month. If you aren't paying more than the minimum payment you will never be able to pay down your credit card debt. If you have an emergency, then you could end up using all your available credit. So, each month try to send in a little extra money in order to pay down the debt.
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.
If you are not happy with your interest rate, ask your bank to change it. If they can not lower your rate, look around for a card with a better rate. After you find a better rate, do not hesitate to make a change.
If you have damaged your credit, think about getting a credit card that is secured. These cards require balances as collateral. Basically, you are paying interest in order to borrow money from yourself. Not the best idea, but it can help you better your credit. Always using a known company for secured credit. Later, you will be able to get an unsecured card.
As you can see, credit cards are nothing to be afraid of. You do not have to stay away from them just because you think you are going to damage your credit, especially since you are more educated on how to properly use them. Keep these tips in mind in order to have great credit!
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