Staying on the right side of credit management means maintaining a good credit standing, and this may be much easier said than done. Just how does one maintain a good credit standing?
There is a general rule of thumb that says your credit balance should be 75% or less of your available limit, preferably less. So if you have a $1000 credit limit, your credit balance (the amount you actually owe your credit company) should never exceed $750 at any given time. There are two ways to do this: first is to never really run up your bills that much, meaning limit the credit spending into less than your self-imposed limit of 75% or less of your credit limit; second is to make sure that even if you have exceeded your self-imposed limit, you can correct it by paying enough on your credit bill which will bring it back again to within acceptable standards.
How do you make sure that your credit expenses only total to that self-imposed limit of $750? The answer is very simple, but that doesn’t mean that is quite easy to do. The answer is: discipline. Always check yourself before making a purchase and swiping that magical card – do you really need it? If yes, do you need it now, or can it wait until you have sufficient funds?
On the other hand, how do you manage to bring back your credit balance to within the acceptable limits of $750? Again, the answer is simple: discipline. The most common mistake a cardholder makes is catching the “swipe and forget” syndrome. After buying the goods and swiping the card away, the purchase and the fact that it needs to be paid in cash, is forgotten. And when the credit report arrives, the cardholder cannot believe the amount that is being charged to her. To avoid this dilemma, make sure to buy only the things you can afford. If you don’t have the money to buy it now, make sure that the money will arrive on the day it is supposed to arrive. This means that you spend only within your paying capacities, and it also implies that there shouldn’t be unscheduled expenses.