Credit cards can be a wonderful financial tool that enables us to make online purchases or buy things that we wouldn’t otherwise have the cash on hand for. Smart consumers know how to best use credit cards without getting in too deep, but everyone makes mistakes sometimes, and that’s really easy to do with credit cards. Keep reading for some solid advice on how to use your credit cards best.
When it comes to credit cards, always try to spend no more than you can pay off at the end of each billing cycle. Doing this can help avoid high-interest rates, late fees, and other such financial pitfalls. This is also a great way to keep your credit score high.
Before closing any credit card, understand its impact on your credit score. Some things can negatively affect your credit score when you close a credit card account. Also, keep the cards open that make up most of your credit history.
You should contact your creditor if you know that you will not be able to pay your monthly bill on time.
Many people do not let their credit card companies know and end up paying very large fees. Some creditors will work with you if you let them know the situation ahead of time, and they may even end up waiving any late fees.
Late fees should be avoided as well as over-limit fees. Both are pretty steep, and the cost of going over the limit can affect your wallet and your credit report. Keep an eye on your finances, and don’t go over your limits.
Ensure you are always paying your credit card bill on time. Every bill you receive will have a due date, and failing to pay by then will result in penalties and costly fees. Furthermore, many credit card providers will increase your interest rate if you fail to pay off your balance in time. This increase will mean that all of the items that you buy in the future with your credit card will cost more.
Watch rewards programs. These programs are quite popular with credit cards. You can earn things like cash back, airline miles, or other incentives just for using your credit card. A reward is a nice addition if you’re already planning on using the card, but it may tempt you into charging more than you usually would just to get those bigger rewards.
It is a good idea to avoid walking around with any credit cards on you that already have a balance. That is a better idea if the card balance is zero or very close to it. Walking around with a card with a large balance will only tempt you to use it and make things worse.
Always track the purchases that you’re making with your credit card. Remember that small, seemingly inconsequential impulse purchases can end up being a huge expense. If you don’t keep yourself in check as far as spending with credit cards, you may not be able to handle the bill by the month’s end.
If you get to a point where you are having a difficult time making the monthly payment on a credit card, then you should destroy the card so that you will not be tempted to use it again. You can still pay it off without having the card in your possession.
As stated previously, credit cards can be quite useful, but they can also hurt us when we don’t use them right. Hopefully, this article has given you some sensible advice and useful tips on the best way to use your credit cards and manage your financial future with as few mistakes as possible!
