It is often hard to find a good credit card offer in all of the bad ones. They may try to lure you in with promises of low rates or great rewards. How does a consumer choose? The article you are about to read can help you understand more about these charge cards and the risks and rewards that come with them.
Before opening a credit card, be sure to check if it charges an annual fee. Platinum and black cars charge very high fees normally, that can range from one hundred dollars all the way up to one thousand dollars. More exclusive cards have higher fees. If you don’t really need an exclusive card, then you can save money and avoid annual fees if you switch to a regular credit card.
Always pay off your entire credit card balance each month if possible. Ideally, credit cards are only for convenience and should be paid completely at the end of a billing cycle. By using credit and paying it off in full, you will improve your credit score and save money.
Always monitor your balance. Know the credit limit of that card. If you exceed your card’s credit limit, you could be charged some hefty fees. It is going to take a longer time to pay off the balance when you’re always going over the limit.
Most professionals say that limits on your bank cards should not be more than 75% of what your salary is every month. If you have limits that go higher than what you make a month, you should try paying these cards off as soon as possible. Interest on your credit card balance can quickly escalate and get you into deep financial trouble.
If you have a spotty credit record, think about getting a secured card. These cards require some kind of balance to be used as collateral. Basically, you are paying interest in order to borrow money from yourself. Not a very good idea, unless you are trying to fix your credit score. When getting a secured card, make sure you stay with a reputable company. You may be able to obtain unsecured cards in the future, thereby improving your credit history that much more.
Avoid closing accounts. Although it could seem like a smart thing to do for improving your credit score, closing accounts could actually harm your score. When you close an account, the amount of overall credit you have is lowered, and this could make your current lending ratio percentage higher.
Discuss lowering your interest rates with the credit card companies you use. In many cases, companies are willing to lower the interest rates of customers who they have a lengthy and positive relationship with. It never hurts to ask, and you could possibly save a bundle!
It is important to keep a running total of what you have charged to your bank cards each month. Remember that impulse purchasing can increase your balance rapidly. If you do not monitor the amount of money you are spending with your credit card, you may not be able to pay the entire bill when month end arrives.
After you have cancelled an account, completely destroy any associated cards. Leaving an expired card or one for a closed account lying around exposes you to risk. If such cards wind up in the hands of someone unscrupulous, they provide all of the necessary information to reopen an account in your name and use your credit without authorization.
If the APR on your credit card is very high and you have excellent credit, you can call your creditor and request a lower rate. A lot of times they will bring it down for you. Any reduction in interest rate can really add up to huge savings for you in the long run.
Keep a highly visible note posted somewhere, reminding you of your card’s balance and your recent purchases. This way, you’ll be reminded of how much you owe and what you are spending your money on. If we don’t control our credit, it will quickly snowball out of control.
If you are transferring the balance from one card to another, at a lower introductory interest rate, make sure you understand the terms and conditions. Try to pay off your balances before the introductory period ends. Oftentimes, after the introductory period has expired, the “real” terms of higher interest rates will apply. Don’t sign anything until you truly understand the consequences.
Many people are used to getting credit card offers almost every day of their lives. With some knowledge and research, dealing with charge cards can be more beneficial to you. Apply what you’ve learned from this article, and make wiser decisions going forward.