Don’t be fooled by those who tell you that it is okay to buy something, if you just put it on a credit card. Credit cards have lead us to have monumental amounts of personal debt, the likes of which have rarely been seen before. Get yourself out of this way of thinking by reading this article and seeing how credit cards affect you.
Decide what rewards you would like to receive for using your credit card. There are many options for rewards that are offered by credit card companies to entice you to applying for their card. Some offer miles that can be used to purchase airline tickets. Others give you an annual check. Choose a card that offers a reward that is right for you.
Carefully study all of the small print. Make sure you understand what you are getting involved in, even if it is a pre-approved card or a company offering help with getting a card. Be aware of how much interest you’ll pay and how long you have for paying it. Furthermore, make sure you are aware of potential fees or billing grace periods.
Emergency, business or travel purposes, is all that a credit card should really be used for. You want to keep credit open for the times when you need it most, not when purchasing luxury items. You never know when an emergency will crop up, so it is best that you are prepared.
If you have multiple cards that have a balance on them, you should avoid getting new cards. Even if you are paying everything back on time, there is no reason for you to take the chance of getting another card and making your financial situation any more strained than it already is.
Do not use credit cards to buy items that you cannot afford. Just because you can use your card to get a new TV doesn’t mean you can afford it. You will pay loads of interest, and the monthly payments may be out of your reach. Walk out of the store, think about it for a few days, and then arrive at a final decision. If you still decide to purchase it, the store’s financing usually gives low interest rates.
Always make certain you are monitoring your credit score. Most companies consider a credit, or FICO, score of 700 to be the cutoff for good credit. Boost or maintain your credit score by using credit appropriately. Once your score hits 700 or above, you will get all the best offers of credit with the lowest interest rates.
You need to pay more than the minimum payment each month. If you aren’t paying more than the minimum payment you will never be able to pay down your credit card debt. If you have an emergency, then you could end up using all your available credit. So, each month try to send in a little extra money in order to pay down the debt.
Knowing the impact that credit cards really have on your life, is a good first step towards using them more wisely in the future. Often times, they are a necessary building block for good credit. However, they are overused and often, misunderstood. This article has attempted to clear up some of those confusing ideas and set the record straight.