It is an excellent idea to open one credit card account that you do not use. Tuck this credit card away for emergency expenses. Exercise discipline in this matter. Your emergency credit card should only be used in real “last resort” situations. If you ever have to use it, pay it off as quickly as possible after the emergency has passed.
Make your payment on time every month. A late fee is normally charged if the payment is not received by the due date. That fee might be as steep as $25; that can be true even if your payment is just one day late. Fees might increase each time you are late. Only use rewards cards if you understand credit use. These kinds of cards encourage you to charge a lot each month to get the rewards, so you can easily fall into credit trouble if you are not careful. It’s better to start off with a credit card that has a low limit than with a rewards card.
Don’t ever let anyone borrow your credit card. It could be your close friend, but it’s still a bad idea to give it to someone. This can lead to excessive charges, over the limit fees, and other problems if your friend happens to charge more than they should.
Once you have applied for a couple of credit cards, don’t keep trying to apply for others. Each time you apply for one, it will show up on your credit report and reflect negatively on your score. Don’t jump on any offer that guarantees approval since usually they charge very high rates.
If you are going to make purchases over the Internet you need to make all of them with the same credit card. You do not want to use all of your cards to make online purchases because that will increase the chances of you becoming a victim of credit card fraud. Never use passwords or pin codes on credit cards that are easy to figure out. It can be a huge mistake if it’s something like your birthday, middle name, or child’s name since anyone can obtain this information. Credit cards are usually tied to varying types of loyalty programs. If you use a card all the time, you need to find one with a useful loyalty program. Used wisely, they can even provide an extra source of income.
Avoid the temptation that credit cards may bring. It’s hard to resist this temptation while knowing you could get away with charging thousands of dollars worth of purchases. That said, you can easily get in over your head, causing years worth of damage to your finances. Wait at least a day or two before making any large purchases so that you can be sure you are buying something you really need. Never be hesitant to ask request that your credit company increase the limit on your card. Many card providers increase your card limit so long as you manage the account properly. Having a larger limit usually helps your credit score, and gives you greater financial flexibility. Have a clear understanding of all the terms involved with your credit card before signing on the dotted line. You might see that their payment schedule, fees, and interest rate are higher than what you thought. Read every word of the fine print to be sure that you completely comprehend the policy.
Always pay your credit card bill on time every single month. Just one late payment may lead to a higher interest rate, substantial late fees and even a scar on your credit report. Consider paying online or setting up automated bill pay, so that you never have to worry about a payment becoming lost in the mail.
Your credit terms for each card should be the determining factor in how the cards are used. Examine the terms for all of your credit cards. From this examination, you can determine which offer the best terms and you should use for daily purchases and which offer unfavorable terms and should be saved for vacations, unexpected expenses and emergencies.
Your credit limit determines how much spending can be put on your credit card. Be sure to never go over the limit, and if possible, only use your cards for emergencies or when you have no other alternative purchasing method. If you are close to your credit limit, you may not be able to use your card during an emergency. Always make sure that the company you give your account number to, online or by phone, it a trustworthy company. When someone calls you, be very wary of giving out your credit card number. You can’t be sure they are who they say they are. There are a lot of scams that people try to use to collect credit card numbers. Protect yourself by remaining diligent.