Often people find themselves in financial trouble due to bad credit card usage. Don’t run away screaming if this describes you. If you’re taking the time to read this article, that means you want to turn over a new leaf and get back on the road to good credit.
Practice sound financial management by only charging purchases that you know you will be able to pay off. Credit cards can be a quick and dangerous way to rack up large amounts of debt that you may not be able to pay off. Don’t use them to live off of, if you are unable to come up with the funds to do so.
Whenever possible, pay off the balance of your credit card every month. In a perfect world, you shouldn’t carry a balance on your credit card, using it only for purchases that will be paid off in full monthly. Credit helps to improve a credit score, but you must pay off the balance each month to avoid interest charges.
Emergency, business or travel purposes, is all that a credit card should really be used for. You want to keep credit open for the times when you need it most, not when purchasing luxury items. You never know when an emergency will crop up, so it is best that you are prepared.
Make the minimum monthly payment in the very least on all of your credit cards. Not making the minimum payment on time can cost you a great deal of money over time. It can also cause harm to your credit rating. To protect both your expenses, and your credit rating be sure to make minimum payments on time each month.
Before you decide on a new credit card, be careful to read the fine print. Credit card companies have been in business for many years now, and know of ways to make more money at your expense. Be sure to read the contract in full, before signing to be sure that you are not agreeing to something that will harm you in the future.
If you wish to have credit cards but you have no established credit, get a co-signer. A parent, friend, sibling or other trusted person with previously established credit can be a co-signer. Of course, they are putting themselves on the line, by becoming responsible for your credit. This method is a smart way to help build your credit with a first credit card.
Only take cash advances from your credit card when you absolutely have to. The finance charges for cash advances are very high, and very difficult to pay off. Only use them for situations in which you have no other option. But you must truly feel that you will be able to make considerable payments on your credit card, soon after.
If you are not satisfied with the high interest rate on your credit card, but aren’t interested in transferring the balance somewhere else, try negotiating with the issuing bank. You can sometimes get a lower interest rate if you tell the issuing bank that you are considering transferring your balances to a different credit card that offers low-interest transfers. They may lower your rate in order to keep your business!
Never rely on credit to buy purchases that you cannot afford. A credit card isn’t the magical solution to getting the flat screen TV or new computer that you have always wanted. Paying huge amounts of money on interest is not smart and should be avoided. Just leave this store, think about it for a couple of days, and then make a decision. If it is still something you wish to purchase, check with the store, as their in-house financing may offer lower interest than your credit card.
Live by a zero balance goal, or if you can’t reach zero balance monthly, then maintain the lowest balances you can. Credit card debt can quickly spiral out of control, so go into your credit relationship with the goal to always pay off your bill every month. This is especially important if your cards have high interest rates that can really rack up over time.
An important thing to remember when using credit cards is to do whatever is necessary to avoid going over your specified credit limit. By making certain that you always remain within your allowable credit, you can avoid costly fees that card issuers frequently assess and guarantee that your account always remains in good standing.
After reading this article, you should know what to do and what to avoid doing with your credit card. It can be tempting to use credit for everything, but you now know better and will avoid this behavior. If it seems difficult to follow these tips, remember all the reasons you want to improve your credit card use and keep trying to change your habits.
