Some people choose to live without bank cards because they fear that they might run up lots of debt if they got one. However, when used properly, they are a great financial tool. They are often convenient ways of purchasing items and reduce the need to carry cash. This article should give you some great advice on how to manage your bank cards.
Before closing a credit account, be sure that you understand how that will affect your credit score. Many times, closing an account leaves a negative mark on your credit record, and should be avoided, even if you do not plan to ever use the account again. If your card has been around awhile, you should probably hold on to it as it is responsible for your credit history.
Carefully study all of the small print. If you receive a pre-approved card offer, make sure you understand the full picture. Know the percent of your interest rate, as well as the length of time you will have to pay for it. Also, find out about any fees and grace periods.
Ensure you don’t overspend by carefully tracking your spending habits. Unless you commit to a spreadsheet or notebook, it can be easy to lose track of where your money went.
Be aware of the rate of interest you are provided. Prior to getting a credit card, it is vital that you are aware of the interest rate. When you do not understand the interest rate, you may end up paying more than what you bargained for. It’s always a good idea to pay off your credit card in full every month, but this may be impossible if you are paying more than you expected.
Be sure to read the fine print of the credit card terms carefully before you begin making purchases to your card initially. In most cases, using the credit card for the first time means you agree with all the terms. Be aware of all of the “fine print” that comes with your credit card!
Anytime you use bank cards for online purchases, print and save a receipt. Keep it until you receive your statement so you can be sure the amounts match. File a dispute with your card company if there is any discrepancy. Having the receipt on hand will make any disputes much easier to resolve.
It is highly recommended that your credit card limits remain less than 75% of the total money you make every month. If your limit is higher than this amount, it’s best you pay it off immediately. The interest on that will soon be way over your head.
A secured credit card may be an option you want to look into if your credit score is in trouble. These cards require a collateral, which is the balance. Basically, you are paying interest in order to borrow money from yourself. This may not be an ideal situation, but it might be one of the only ways that will help you repair your credit. Just remember that you still need to ensure the company you’re dealing with is honest. They may later offer an unsecured card to you, and that will boost your credit score even more.
Know that some charges, like restaurant and grocery charges, take longer to appear on your statement than others. That may cause you to spend greater sums of money, because you had the impression that more credit was available to you.
If you have more than one credit card, it is wise to pay at least one off each month. Even if you carry large debt on your other cards, keeping a card that is paid off each month helps build a more positive credit record.
Secured cards are an excellent way for credit companies to weigh your credit worthiness. This type of account will usually lead to an unsecured credit account if you are diligent with your payments. Also, once you have proven yourself you may begin receiving credit card offers in the mail. This is the time when you have decisions to make, so that you can re-evaluate the situation.
Always check your discipline before opening a new credit card. Many consumers are addicted to spending and create more debt than they can manage. People like this shouldn’t even have a credit card. Owning a credit card can lead to these individuals getting themselves into huge amounts of debt.
The advice you have read here can help even the most credit-shy consumer conquer their fears. Credit cards are useful when used properly, so it is unnecessary to fear them. Just remember what you have learned and everything will be okay.