Tips for Using Credit Cards Wisely
The way a credit card should be used doesn't come from our instincts. It is something that requires the corresponding time to be studied before even starting to use credit cards. Here are some tips that will help you use your credit cards without hurting your credit or incurring too much bad debt.
First of all you should avoid compulsive spending.
This means that you should avoid purchasing items you don't need. It will be hard for you to achieve financial wealth if you don't have control over your spending habits. Learn to distinguish what you really need from what you just want badly use your credit card only for necessities.
Avoid using your credit card as a substitute of cash.
This is one of the fastest ways in which you can go into deep debt. Use your cash or debit card when you have to buy ordinary things as food or clothing. Additionally, if you cannot afford to buy something today using cash, chances are that using your credit card for the purchase will only worsen your situation. Living above your means is one of the quickest ways to end up in deep debt.
Stay within 30% of the credit limit you are imposed.
This is a rule that you should always try to stick to. This is needed since a big portion of your credit score is composed by the amount of debt you are in. Your credit score will be influenced in a positive way by the low balances you maintain, which are also easier to manage.
Make more than the minimum payment required.
You should not make only the minimum payment you are required since it will take more time to return the money, which leads to the accumulation of the interest rate you are liable to. Paying more will lead to the quicker paying off of the debt. Pay the maximum on your balance every month so that you cover your debt in a shorter time period.
Try to negotiate with your creditor a lower interest rate.
Remember that the interest rate is what determines to a great extent how much you will pay for carrying your credit card balance. Thus, compare the interest rate offers from other companies and make regular assessments to your interest rate payments to ensure you have the best deal.
Inform your credit card company in advance for any expected late payment.
When you are not able to make the monthly on time, it is recommended that you inform your credit card company in advance. Not paying your credit card off is one of the worst mistakes that can be committed. If you tell your reason beforehand for not being able to make a payment, you may receive the assistance of your creditor. You can always call him/her and ask for a late fee waiver by explaining the reasons for your inability to pay.
Finally, studying the basics of credit cards is one of the requirements that will lead toward your wise use of credit cards and getting the best out of them.
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