There is no denying the fact that credit cards can indeed, be part of a smart financial strategy. The important thing to remember is that they must be used wisely and deliberately. By using the ideas in this piece, you will arm yourself with the information necessary to make the types of decisions that will pave the way to a secure financial future for you and your loved ones.
Do not use your credit card to make purchases or everyday items like milk, eggs, gas and chewing gum. Doing this can quickly become a habit and you can end up racking your debts up quite quickly. The best thing to do is to use your debit card and save the credit card for larger purchases.
If you apply for a store branded credit card, make sure it is a store that you shop at regularly. Each time a retail store inquires about your credit report, it gets recorded, regardless of whether you actually take the card. Repeated applications for credit could negatively affect your overall credit score.
Try your best to stay within 30 percent of the credit limit that is set on your card. Part of your credit score is made up of assessing the amount of debt that you have. By staying far under your limit, you will help your rating and make sure it does not start to dip.
Avoid being the victim of credit card fraud by keeping your credit card safe at all times. Pay special attention to your card when you are using it at a store. Double check to make sure you have returned your card to your wallet or purse, when the purchase is finished.
Try to avoid any credit card fees–late payment fees, annual fees, and exceeded limit fees. Incurring debts beyond your credit limit can have negative repercussions on your credit score as well as expose you to expensive penalty fees. Pay attention and make sure you stay under your credit limit.
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.
Never give in to the temptation to allow anyone to borrow your credit card. Even if the friend is a very good one and they are really in need of the card, it just isn’t a smart idea to lend yours out. This can lead to your friendship being ruined. Or it can result in over the limit charges should your friend charge more than you authorized.
If anyone asks you to give them your credit information or card number over the phone, never give it to them. Scammers often do this. You should give your number only if you call a trusted company first to pay for something. People who contact you cannot be trusted with your numbers. It does not matter who they say they are, you don’t know that they are being honest.
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.
Ask your credit card provider to decrease your credit card’s APR interest. If you have been a good customer for a while, many credit card providers will be more than happy to lower the interest rate that they are charging you. This can save you hundreds of dollars a year and all it takes is a phone call.
Whenever possible, do not use your credit card for the grocery store or eating at restaurants. These charges occasionally will take time to be applied to your statement and can lead to your account being out of balance. This can cause you to spend more than you would like to because your credit card balance will appear lower than the amount you are actually responsible for.
Transferring a credit card balance from a high interest credit card to a card where the rate is less, can save you money every month. Credit card companies offer special introductory rates to attract new business to their credit cards. If you take advantage of one of these offers, make sure that you understand the amount of time that the introductory rate offer lasts.
Try your best to use a prepaid credit card when you are making online transactions. This will help so that you do not have to worry about any thieves accessing your real credit card information. It will be much easier to bounce back if you are scammed in this type of situation.
Always follow your credit score and credit report in order to see your accounts’ health. It’s also good to see how other people manage their credit. Be sure to take note of any errors that show up on your report. If you find one, speak with your credit card institution and credit bureau.
Be wary of signing up for credit cards for all the wrong reasons. Yes, enough miles for an incredible vacation sounds terrific, but do you really need that additional card? You may find the interest you pay on that card, especially when it is maxed out, will pay for that trip multiple times over.
When applying for a credit card, be sure that you check out the schedule of fees that may apply to you. This is important because if you do find yourself in a situation where you miss a payment, you do not want to be faced with late payment fees that you cannot afford.
It can be tempting to use credit cards to purchase things that you cannot, in reality, afford. That is not to say, however, that credit cards do not have legitimate uses in the broader scheme of a personal finance plan. Take the tips in this article seriously, and you stand a good chance of building an impressive financial foundation.