Some individuals panic at the thought of charge cards and potential troubles. There is no reason to fear owning a credit card. Charge cards can be helpful when you need to purchase items but don’t want to use cash. In the article that follows you can find advice that will help you with credit cards.
You should try to have at least two open cards or possibly three open credit accounts. This is especially helpful when building a good credit score, but remember these cards should be paid in full monthly. Do not over-do it. Having more than three credit cards can concern a lender looking at your credit report.
Learn how closing the account associated with your credit card will affect you before you shut it down. Sometimes closing a card can have a negative affect on your credit, so you should avoid doing so. Also, maintain cards that have most of your credit history.
Inspect the fine print carefully. If there’s an offer for a pre-approved credit card or if a person says they can help you get a card, get all of the details beforehand. Find out what your interest rate is and the amount of you time you get to pay it. Also, know what fees are associated with the account and if there are any grace periods.
The reason credit card companies have minimum payments is because this is the amount they would like you to pay so they get the most money out of you over a longer period of time. Always try to make payments larger than the stated minimum. Avoid paying interest fees for long periods of time.
Check your balance carefully when your statement arrives. You should also remain aware of your credit limit. If you pass that limit, you will end up paying more in fees than you know. This will make it harder for you to reduce your debt if you continue to exceed your limit.
Make sure you are smart when using a credit card. Put a limit on how much you spend and only buy items you know you can afford. Before any purchase, make sure you have the money to pay back what you’re going to owe; this is a good mindset to have. If you hold onto your balance, your debt will keep increasing, which will make it much more difficult for you to get everything paid off.
Read the small print before signing up for a credit card. You might find that the rate of interest is too high, the payment schedule is not flexible, or the fees are too stringent. It is best to read and understand all the fine print before accepting and using a credit card.
If your credit score needs some work, a credit card that is secured may be your best option. A balance is required as collateral with these kinds of charge cards. This means that you are borrowing from yourself and then paying interest to do so. It isn’t ideal, but it’s the only method to improve your credit. Always using a known company for secured credit. They might offer you better cards later which can further enhance your credit score.
It is a good idea to get a copy of your personal credit report every year to make sure that everything on there is accurate. Ensure that your credit report and annual statements match up.
When you open a credit card account, try to keep your account open for as long as possible. Once you open a card, keep it open and use it regularly; don’t constantly switch credit cards. A long account history has a positive effect on your credit score. Part of having good credit is keeping the accounts open.
Know your credit card laws to ensure that you are protected. A credit card company is prevented by law from retroactively increasing rates, for example. It’s also against the law for them to bill more than once in a cycle. Read, and keep yourself up-to-date on all of the laws that apply to credit card companies. The Fair Credit Billing and the CARD Act are two of the major changes that have recently been made.
Be certain you monitor card transactions carefully. Ideally, you should sign up for text alerts if they are offered by your credit card company. This gives you the opportunity to report any irregular activity as soon as possible after it occurs. When suspicious or irregular activity occurs, you have to notify the card company or bank as soon as possible, and at times, the police should be contacted as well.
You can avoid unintentional credit purchases by putting your debit cards on top of your charge cards. In cases where you are distracted or in a hurry, this makes it more likely for you to use your debit cards by default instead of your charge cards.
Before providing your child with a credit card, make sure that he or she is responsible enough to have one. It might be hard to refuse them or admit they are not ready, but it will help them become more financially responsible and avoid ruin.
Report a missing card immediately to your credit card company. If the stolen card starts getting used prior to you reporting it missing, you could be responsible for any charges. Once you report your card to be missing, the credit company cannot require you be responsible for any unauthorized charges.
Knowing what you’ve now read about charge cards, you should be comfortable with the fact that a credit card isn’t something to fear. If you use a credit card responsibly it can actually be extremely useful. Just remember what you have learned and everything will be okay.