In this “consumer beware” world that we all live in, any sound financial advice you can get is helpful. Especially, when it comes to using credit cards. The following article will offer you that sound advice on using credit cards wisely, and avoiding costly mistakes that will have you paying for a long time to come!
Be wary of late payment charges. Many of the credit companies out there now charge high fees for making late payments. Most of them will also increase your interest rate to the highest legal interest rate. Before you choose a credit card company, be sure that you are fully aware of their policy regarding late payments.
Before canceling a credit card and closing your account, ensure you understand how canceling it affect your credit. There’s times when you close a card that can have negative affects on your next credit report. Also, maintain cards that have most of your credit history.
Read the fine print. Make sure you understand what you are getting involved in, even if it is a pre-approved card or a company offering help with getting a card. Be aware of how much interest you’ll pay and how long you have for paying it. You should also learn of grace periods and any fees.
Read the small print before signing up for a credit card. It is possible to discover rates that are higher than you expected. The only way you can fully comprehend a credit card policy, is by reading every inch of fine print.
In order to keep a good credit rating, be sure to pay your bills on time. Avoid interest charges by picking a card that has a grace period. Then you can pay the entire balance that is due each month. If you cannot pay the full amount, pick a card that has the lowest interest rate available.
Be sure to get assistance, if you’re in over your head with your credit cards. Try contacting Consumer Credit Counseling Service. This nonprofit organization offers many low, or no cost services, to those who need a repayment plan in place to take care of their debt, and improve their overall credit.
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.
Never charge items on credit cards that cost far more than you have to spend. While credit can help you afford things you can pay off over a few months, avoid charging expensive items that you cannot pay off quickly.
You should always try to negotiate the interest rates on your credit cards instead of agreeing to any amount that is always set. If you get a lot of offers in the mail from other companies, you can use them in your negotiations, to try to get a much better deal.
Pay 100% of your credit card bill each month if you can afford it. The best use of credit cards is for convenience to be fully paid within the same billing cycle. When handled correctly, your credit card can actually act as a credit builder, boosting your overall profile.
Some people think that avoiding credit cards altogether will help their credit because they won’t have any debt. It is important to have one card or more in order to build credit. Use the card, then pay the balance off every month. If you do not have any credit cards, your credit score will be lowered and you will have a harder time being approved for loans, since lenders will not know able you are to pay off your debts.
It is a good rule of thumb to have two major credit cards, long-standing, and with low balances reflected on your credit report. You do not want to have a wallet full of credit cards, no matter how good you may be keeping track of everything. While you may be handling yourself well, too many credit cards equals a lower credit score.
If you have good credit, but are paying a high annual percentage rate, contact your credit card issuer and ask them to lower it. Sometimes, they will do just that. Each time you do not pay off your balance, you will save money.
Keep a list of all your credit card information in a safe place. List all of your credit cards along with the credit card number, expiration date and phone number, for each of your cards. By doing this you will always have all of your credit card information in one place should you need it.
Hopefully the above article has given you the information necessary to avoid getting in to trouble with your credit cards! It can be so easy to let our finances slip away from us, and then we face serious consequences. Keep the advice you have read here in mind, the next time you go to charge it!