Credit cards have the potential to be useful tools, or dangerous enemies. The best way to understand the right ways to utilize credit cards, is to amass a substantial body of knowledge about them. Use the advice in this piece liberally, and you have the ability to take control of your own financial future.
Know your credit history before applying for new cards. The new card’s credit limit and interest rate will depend on how bad or good your credit history is. Avoid any surprises by getting a report on your credit from each of the three credit agencies once a year. You can get it free once per year from AnnualCreditReport.com, a government-sponsored agency.
Credit cards should always be kept below a specific amount. This total depends on the amount of income your family has, but most experts agree that you should not be using more than ten percent of your cards total at any time. This helps insure you don’t get in over your head.
If you can’t pay your credit card balance in full each month, be sure to make at least double the minimum payment until it is paid off. Paying only the minimum will keep you trapped in escalating interest payments for years. Doubling down on the minimum will help to ensure you get out from the debt as soon as possible. Most importantly, stop using your credit cards for anything but emergencies until the existing debt is paid off.
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.
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.
If you travel internationally a lot and you will be using your credit card frequently, go with a company that does not charge a foreign transaction fee. These fees can end up costing you tons of money, even up to as much as 3% more than what you would normally pay.
Sometimes, when people use their credit cards, they forget that the charges on these cards are just like taking out a loan. You will have to pay back the money that was fronted to you by the the financial institution that gave you the credit card. It is important not to run up credit card bills that are so large that it is impossible for you to pay them back.
Read, memorize and then, understand the terms and conditions of each and every credit card you have. Know what the interest rate is, as well as, what each fee is and have the payment and bill cycles marked on your calendar. Doing this means there will be no surprises when it comes to your card.
Far too many people have gotten themselves into precarious financial straits, because of credit cards. The best way to avoid falling into this trap, is to have a thorough understanding of the different ways credit cards can be used in a financially responsible way. Put the tips in this article to work, and you can become a truly savvy consumer.