You can build your credit rating and manage your finances by using bank cards wisely. However, a credit card should not be taken out on a whim, and consumers should always be educated about their cards. The following is a list of credit card basics that can help consumers everywhere to make educated decisions when it comes to their plastic.
Never close a credit account until you understand how it affects your credit history. Often, closing out a credit card accounts will adversely effect your credit rating. It is important that you keep your oldest bank cards open, as they account for your credit history.
Many credit cards offer significant bonuses for signing up for a new card. It is important to totally understand the specific terms laid out by the credit card company since you must follow their guidelines to qualify for a bonus. The one that comes up the most is that you’re supposed to spend a very certain amount in the next few months to qualify for the bonus offer.
If your financial situation takes a turn for the worse, it is important to notify your credit card issuer. Oftentimes, the credit card company might work with you to set up a new agreement to help you make a payment under new terms. In many cases, after setting up such a deal credit card companies will not have to make late payment reports to the credit bureaus.
Set a realistic budget, so that you are able to stick to it. Just because your credit card company has allowed you a certain amount of credit doesn’t mean you have to spend it all. A solid budget lets you stay on top of how much you can afford to pay each month to eliminate your balance and avoid interest charges.
It is normally a bad idea to apply for a credit card as soon as you become old enough to have one. Instead, wait a few months and ask questions so that you completely understand the pros and cons to a credit card. Learn how to be a responsible adult before you apply for your first card.
When developing a PIN or a password, make it one that is hard to make any sort of guess about. Never use your middle name, one of your children’s names or dates of birth as a password because the information is easily obtained by someone who sets their mind to it.
If your mailbox does not contain a lock, do not order cards through the mail. Credit card thieves have admitted to taking cards out of mailboxes that were unlocked.
To save money, don’t hesitate to negotiate a lower interest rate with the company associated with your bank cards. If you are a long-time customer, and have a good payment history, you might succeed in negotiating a more advantageous rate. All you have to do is make a phone call, and ask for a better rate that will save you money.
Keep an eye on your credit report and score. Most creditors think of 700 as the lowest number you can have while still being considered to have good credit. Use your credit properly to maintain this level, or if you’re not there, use this method to reach this level. At a score greater than 700, you will get the best rates and offers.
Make a list containing the account numbers of your credit cards and any phone numbers associated with your lenders. Maintain it in a secure place, like a safe, and keep it separated from your cards. This list ensures that you can contact your creditors promptly if your wallet and cards are lost or stolen.
It is a mistaken action to not have charge cards at all to avoid having any debt. It is important to have one card or more in order to build credit. If you are going to use it, pay the total debt at each statement. If you do not have a history of credit usage, your credit score will actually be lower and potential lenders will not have any way to see if you can handle credit.
As was said before, consumers can benefit from the proper use of bank cards. Understanding individual cards is important, because this helps you in making educated choices. If you understand the basics of how credit cards work, you can make better decisions regarding credit.