Having a credit card can be a good way to build a responsible credit history. 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.
To retain a favorable credit score, be sure to make your payment for your credit card by the due date. Your score is damaged by late payments, and that also usually includes fees that are costly. Using automatic payment features for your credit card payments will help save you both money and time.
Make sure you completely understand credit card terms before you sign up for the card. You may find that the interest rate, payment schedule and fees, are more than what you initially thought they would be. Read every word of the fine print to be sure that you completely comprehend the policy.
Don’t put off signing the back of any new charge cards you’ve been issued. If you don’t sign it immediately, your card can easily be stolen and used. Merchants often require cashiers to verify that signatures match in order to keep your cards safe.
Don’t use passwords and pin codes on your charge cards that can easily be figured out. Never use your birth date, children’s names, middle name, or anything else that could be figured out easily by someone looking to steal from you.
Never, ever use your credit card to purchase something that you cannot afford. You might want a flat-screen television, but that doesn’t mean that you should use your credit card to buy it. You will end up being charged lots of interest and you may be unable to keep up with the monthly repayments on your credit card. Just leave this store, think about it for a couple of days, and then make a decision. Then, if you decide to purchase it, you may be able to get low interest rates through in-house financing.
Keep an eye on your credit rating. Good credit typically starts around the 700 range. Proper use of credit cards can be one way to improve or maintain a good credit score level. With a credit score of at least 700, you will receive the lowest interest rates and best credit offers.
Write down the card numbers, expiration dates, and customer service numbers associated with your cards. Secure the list in a spot away from the cards themselves. Such a list is helpful when you need to quickly get in touch with lenders in the event your cards are lost or stolen.
Don’t be tempted to pay off the balance on your card immediately after using it. All you have to do is wait for a statement to come, and pay that balance. This shows a good payment history and enhances your credit score as well.
Avoid prepaid cards if you are looking to get a secured credit card. In reality, they are debit cards and don’t send reports to credit bureaus that might help improve your record. Prepaid debit cards do little for you besides provide you with an additional checking account, and many prepaid debit companies charge high fees. Put a deposit down and get a secured card that reports to the credit bureaus and helps to improve your score.
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. However, take the time to truly understand the charge cards and what they can do to help you, so you are able to make informed decisions. Grasping the fundamental information about bank cards can assist consumers in making smart credit choices, too.