Credit cards are helpful tools in building credit and managing money. It is necessary to gain an understanding of credit cards, however, in order to use them wisely. The piece that follows includes credit card fundamentals aimed at helping consumers make smart decisions about their finances.
Do not lend your credit card to anyone. Credit cards are as valuable as cash, and lending them out can get you into trouble. If you lend them out, the person might overspend, making you responsible for a large bill at the end of the month. Even if the person is worthy of your trust, it is better to keep your credit cards to yourself.
Try your best to stay within 30 percent of the credit limit that is set on your card. Part of your credit score is made up of assessing the amount of debt that you have. By staying far under your limit, you will help your rating and make sure it does not start to dip.
Avoid being the victim of credit card fraud by keeping your credit card safe at all times. Pay special attention to your card when you are using it at a store. Double check to make sure you have returned your card to your wallet or purse, when the purchase is finished.
Do not apply for any credit cards by mail if your mailbox is not lockable. Many credit card thieves say they got their cards from unsecured mailboxes.
If you are determined to stop using credit cards, cutting them up is not necessarily the best way to do it. Just because the card is gone doesn’t mean the account is no longer open. If you get desperate, you may ask for a new card to use on that account, and get trapped in the same cycle of charging you wanted to get out of in the first place!
Everyone has had this experience. You receive another credit card solicitation by mail, with an offer for you to apply for a credit card. Sometimes you may want a new card, sometimes you might not. Always shred any credit card offer that comes through the mail. While it may be tempting to just toss them in with the rest of the garbage, these solicits contain personal information, and you should take the time to protect yourself.
Look into whether a balance transfer will benefit you. Yes, balance transfers can be very tempting. The rates and deferred interest often offered by credit card companies are typically substantial. But if it is a large sum of money you are considering transferring, then the high interest rate normally tacked onto the back end of the transfer may mean that you actually pay more over time than if you had kept your balance where it was. Do the math before jumping in.
Now it is probably clear that credit card usage can help people as they work on building up their credit history and taking control of their money. It is important that you understand everything about your cards, because that will lead you to make better decisions where they are involved. Grasping the fundamental information about credit cards can assist consumers in making smart credit choices, too.