Don’t let the fear of credit cards stop you from improving your score, buying the things you need or want. There are proper ways to use credit cards, and when done correctly, they can make your life better instead of worse. This article is going to show you just how to do it.
Always read the fine print to see if there’s an annual fee before accepting an exclusive credit card. Annual fees for premium credit cards can range in the hundred’s or thousand’s of dollars, depending on the card. If you will not use the benefits of an “exclusive” card, the fee is not worth it.
If you have a credit card with high interest you should consider transferring the balance. Many credit card companies offer special rates, including 0% interest, when you transfer your balance to their credit card. Do the math to figure out if this is beneficial to you before you make the decision to transfer balances.
An important aspect of smart credit card usage is to pay the entire outstanding balance, each and every month, whenever possible. By keeping your usage percentage low, you will help keep your overall credit score high, as well as, keep a substantial amount of available credit open for use in case of emergencies.
Take the time to play around with numbers. Before you go out and put a pair of fifty dollar shoes on your credit card, sit with a calculator and figure out the interest costs. It may make you second-think the idea of buying those shoes that you think you need.
Make sure to sign your cards as soon as your receive them. Many merchants require the cashier to verify the signature matches so that you can keep your card safer.
Keep an eye on mailings from your credit card company. While some might be junk mail offering to sell you additional services, or products, some mail is important. Credit card companies must send a mailing, if they are changing the terms on your credit card. Sometimes a change in terms can cost you money. Make sure to read mailings carefully, so you always understand the terms that are governing your credit card use.
Do not apply for any credit cards by mail if your mailbox is not lockable. Lots of credit card thieves say that they have taken cards from people’s unlocked mailboxes.
Always know what your utilization ratio is on your credit cards. This is the amount of debt that is on the card versus your credit limit. For instance, if the limit on your card is $500 and you have a balance of $250, you are using 50% of your limit. It is recommended to keep your utilization ratio of around 30%, in order to keep your credit rating good.
You have read a lot here today about how to avoid common mistakes with credit cards, and also the best ways to use them wisely. Although there is a lot of information to learn and remember, this is a good starting point for making the best financial decisions that you can.