While there is a need for cash, credit card use is quickly increasing. As banks raise fees for regular accounts and debit cards, many people are using only credit cards for storing money and making transactions. Keep reading to find out how to use credit cards wisely.
Avoid purchasing items out of your budget with a credit card. While it’s fine to use your card to purchase an item you can pay for later, it is not a good idea to purchase something you will have trouble paying down the line.
Learn how closing the account associated with your credit card will affect you before you shut it down. In some circumstances, closing credit card accounts can negatively affect the credit report, which is something that should be avoided. Furthermore, work on keeping open the cards you have had the longest.
Watch for new cards that offer a signing-up bonus if you are looking to add a credit card to you wallet. Be sure that you fully understand the fine print, though, because many of these cards have very specific terms that you must meet to qualify for the bonus. Frequently, you are required to charge significant sums on the card in a short time to qualify for the bonus. Be sure to understand those terms so you are not disappointed.
Know what interest rate your credit card gets. It is extremely important before you sign on to getting that credit card that you must know the interest rate. If you don’t, you might end up paying so much more money in interest. If you have to pay a lot of interest, then it may be impossible for you to make your monthly payments.
Never use passwords or pin codes on credit cards that are easy to figure out. Using your birth date, middle name or your child’s name can be problematic, as it is not difficult for others to find out that information.
Don’t make a written record of your credit card’s PIN or password. Be sure to keep the password in your mind only, so you’re the only person who can access it. Putting the number and password down on paper can be an invitation to fraud and financial disasters.
If anyone asks you to give them your credit information or card number over the phone, never give it to them. Scammers use this trick all the time. Only provide your number to businesses you trust, along with your card company if you call about your account. Never give your numbers to someone who calls you. No matter who they claim to be, you do not know who they are.
Many experts suggest that your credit limit on a given card should never exceed three-quarters of your monthly income. If your balance is more than you earn in a month, try to pay it off as quickly as you can. This is because the interest you are paying will quickly snowball out of control.
Credit cards are growing as the electronic medium of choice for many individuals who prefer them over the increasing regulations and fees of debit cards. With this growth, you can take advantage of the benefits credit cards have. Apply what you’ve learned in this guide to get all what you can from credit cards.