Anyone can build credit, while managing their finances, with a credit card. You should understand the advantages and pitfalls of having access to easy credit. The following is a list of credit card basics that can help consumers everywhere to make educated decisions when it comes to their plastic.
You may want to consider keeping a couple of credit card accounts open at any given time. If you can pay your bill in full each month, this number of cards will help you to improve your credit score. However, if there are more than three cards to your name, a lender may think that’s no good when looking at your personal credit bureau report.
You may want to find a co-signer if you don’t have enough credit to get your own card. This can be a family member or friend with existing credit. A co-signer states they are willing to be responsible for the debt if you default. Doing so is a good way to start building credit.
Understand the terms and conditions for any credit card prior to agreeing to the use of the card. You might see that their payment schedule, fees, and interest rate are higher than what you thought. The fine print can be daunting, but a little effort can make a huge difference in your financial situation.
If you do not own a locking mailbox, never order credit cards through the mail. Many thieves have admitted to stealing cards from mailboxes when those boxes did not lock.
It is a bad idea to make credit card purchases using a public computer. Your information will be stored on these public computers, such as those in coffee shops, and the public library. If you use these and put credit card numbers into them, you could face a lot of trouble later on. Make sure that all purchases are made on your computer, always.
We have all experienced it: “You have been pre-approved for a credit card!” There may be times when you want to get one, but not all the time. Whenever you discard this type of mail, you need to destroy it. Don’t throw it out without taking this step because your personal information may be on the credit card offer.
Keep a list of the “lost/stolen card” phone numbers for each of your credit card issuers along with your credit card number for reference. This list should be kept in a safe location away from your charge cards. Should your cards ever be lost or stolen, you can use this list to promptly notify the companies that issued your bank cards and advise them of the situation.
Secured charge cards could be the best option when your credit is less than stellar. They are simply charge cards for which a deposit is necessary to guarantee payment. Basically, you borrow your own money, paying interest to be able to do so. This may not be an ideal situation, but it might be one of the only ways that will help you repair your credit. Just make sure you are working with a reputable company. These companies might offer you one of their unsecured bank cards later, which helps you secure a better score.
Try to avoid paying for grocery and restaurant bills on a credit card because they sometimes take a long time to show up on your statement and you will underestimate your available balance. Because of this, you may not know your true account balance.
Look over your card statements thoroughly. Check each statement for any inaccuracies as well as changes you did not authorize. It’s important to contact your credit card provider about any discrepancies as soon as possible. This can help to prevent you from paying too much and it might just save your credit score too.
Verify all fees surrounding cards and don’t think of only annual percentage and interest rates. The card may come with additional fees and charges that make the card unbearable.
Talk over your interest rate with the company that issued your card. You may be able to get better interest rates by negotiating with your credit card company. If you have made all your payments on time and have proven to be a good customer, chances are they will give you a lower APR if you ask.
A simple way to minimize impulsive or accidental credit charges is to place your debit cards in front of your charge cards in the pockets of your wallet. By doing this, you will be more likely to choose your debit card over your credit card, even if you are in a rush.
As you have seen, bank cards can be a great help in building or re-building a person’s credit, as well as a tool to help one learn to make wise choices with their money. But before one can properly grasp how to handle dealing with credit, the first step is learning a bit about finances in general, particularly charge cards. Knowing what to expect from having a credit card will help you make better choices.