Credit cards usually are seen as indicators of high interest rates and too much danger when using them to spend. However, properly used, credit cards can offer benefits like peace of mind, conveniences and even perks and rewards. Continue reading to learn the many benefits of credit cards, as well as how to avoid their many pitfalls.
Don’t apply for every possible credit card. Having a wallet full of cards can make paying your bills confusing. Keep it simple with just a few cards. Also, if you have lots of unsecured credit at your disposal, you are more likely to buy things you don’t need and run up huge amounts of debt.
Those that want a new card should only look at those without annual fees that have lower interest rates. With the plethora of suitable credit cards available without annual fees, there is simply no reason to get stuck with a card that does charge one.
Approach zero percent credit card rates with caution. Although 0% interest rate cards look appealing, the rate will increase when the introductory rate is over. Always keep track of your credit card balances when making purchases.
Never spend more than can be repaid when you are using your credit cards. Unless you track your purchases, it’s easy to spend way too much.
Make sure to sign your cards as soon as your receive them. While most merchants do check for signature matches, a blank signature area is easily forged by thieves and hard to catch by cashiers. So, be safe and sign the back of your cards to prevent this problem.
If you are going to utilize more than one credit card, always pay them according to the highest APR. If possible, transfer balances on high interest credit cards to the one with the lowest APR. Try to minimize the debt you carry. However, if you need to carry a balance, using the cards with the lowest APR can reduce the amount you spend on interest payments.
Whenever you notice a late fee listed on your credit card statement, try calling the company and asking them to remove it. If you are otherwise a good customer, and normally pay your bill on time, they are often willing to waive this fee.
Don’t think that interest rates they offer you are written in stone and cannot be changed. Just like any other business, credit card companies are in competition with each other and have many interest rates available to them. If you dislike your interest rate, get in touch with your bank and request a change.
Try to only utilize your credit card only when absolutely necessary. At other times, consider using a debit card. An example of this would be if you were about to make a big purchase like a computer, you may then want to use a credit card. For your smaller purchases utilize your debit card. This can result in significant savings.
Once you’ve closed your account, destroy your card and related information. It isn’t a good idea to toss it in a drawer or allow your child to use it as a toy, even if the account is closed. Someone could still glean information about you from the card, open another account in your name, and start racking up debt.
Check the fine print of credit card offers. If you receive a pre-approved card offer, make sure you understand the full picture. Be aware of how much the interest rates are going to be, and how much time it will take you to pay for it. Furthermore, make sure you are aware of potential fees or billing grace periods.
Many people receive several solicitations through the mail. These solicitations often arrive in your mailbox offering you a credit card with their company. Sometimes you may want a new card, sometimes you might not. Shred this mail before throwing it away. Avoid tossing it in the garbage intact because the application might contain some confidential information.
Pay your credit cards on time every month. Missing just one payment can result in the imposition of higher interest rates by the credit card company. A payment that is missed or made late also shows up in your credit report and lowers your credit score. To ensure that you avoid late payments, it may be wise to enroll in automatic payment programs.
If you have a frequent flyer rewards card, be sure you know the details of how to earn and redeem rewards. Double check all the fine print. Some rewards have fees and blackout dates that can make the rewards practically useless. Companies have a good reason for making these restrictions difficult to comprehend. They may offer you rewards, but that does not automatically mean they are hoping you will use them. They are just trying to get you to apply for one of their cards.
Consider using your credit card for major electronic purchases. Some credit cards include buyer protection plans or extended warranties as perks, and these benefits generally exceed the item’s standard warranty. Make sure you will be able to pay the balance before interest begins to accrue.
If you are going to travel to other countries, get in touch with the credit card company prior to leaving. Credit card companies can shut down a card’s international operations if it is being used abroad in a suspicious manner. If you advise your company before hand, you shouldn’t have any problems abroad.
If you are trying to rebuild damaged credit, using secured credit cards is a good idea. A secured credit card require a balance for collateral. You basically borrow money from yourself, although you have to pay interest on the loan, too. Not ideal, but it may be the only way to repair your credit standing. If you want a secured credit card, stick with large, well-established credit card companies. They might offer you one of these cards at a later time, and this can help with your score some more.
Credit cards can provide many benefits when used in a smart way. From knowing you’re able to pay for emergencies to getting a lot of rewards and perks, credit cards are hopefully a little less scary for you to think about now. Just use your credit wisely so that it benefits you, instead of increasing your financial challenges.