The first step in choosing a credit card is making sure the benefits outweigh the costs. The proper use of a credit card can help ensure you maintain a positive credit score. More people have bank cards than really know how to use them wisely, and this gets too many in hot financial water.
It is a good idea to have a couple of open bank cards. This is especially helpful when building a good credit score, but remember these cards should be paid in full monthly. 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.
A cosigner can help you obtain a credit card if you have yet to establish credit. A parent or other relative may be willing to be a co-signer. They have to understand that they will sign a document stating that if you fail to pay your credit card, they will be responsible for the balance. This is a good method for improving and building your credit.
If you want to get your hands on a great credit card, watch your credit score. Credit card companies offer lower interest cards to consumers who have good credit scores. In order to get accepted for charge cards that have low interest rates, lucrative reward schemes and low fees, you need to have a stellar credit score.
Keep up with the emails and correspondences from your credit card company. Read them immediately. Credit companies can change their interest rates, fees and other account details, as long as the companies provide you with advance written notice. Read the correspondence carefully to check for any unwanted changes. You have the right to cancel your card if you don’t like these changes!
Those of you looking to get a new credit card should limit their search to cards that have low interest rates and do not have an annual fee. There are a lot of credit cards that have no annual fee, so you should avoid the ones that do.
When doing an online transaction with your credit card, save a copy of the transaction receipt. Keep the receipt until your bill comes in and verify all charges. If they didn’t, call the company and immediately file a dispute. This is a great way to make sure you are never overcharged for the items you buy.
Fill in all spaces when using your credit card at a retail establishment. Always strike out the tip line in order to prevent others from filling in an amount of their choosing. You should also check your statements to ensure your purchases actually match the ones that are on your monthly statement.
Use a checkbook balance-type system to keep track of your monthly credit card spending. Remember that buying on impulse can be costly. If you spend without much consideration, you may find that you cannot repay the full balance when the bill arrives.
Check into all fees and charges that go along with a card for which you are thinking of applying for, not just the interest rate and APR. Sometimes there are charges like cash advance rates, service charges and application fees that would make the card not worth it.
If you have a secured credit card, sometimes the company is willing to offer you an unsecured credit card after you have proved your good standing. Credit card offers will probably start arriving in your mail again when you reach this point. This is the perfect time to re-think your bank cards needs.
As previously discussed, it is extremely easy to get in over your head when you utilize charge cards. Having a couple of extra cards and making a few extra purchases can lead to real issues quickly. Use the information you’ve read here to become a more educated credit user and make smart financial decisions.