Credit cards can be a wonderful financial tool that enables us to make online purchases or buy things that we wouldn’t otherwise have the cash on hand for. Smart consumers know how to best use credit cards without getting in too deep, but everyone makes mistakes sometimes, and that’s really easy to do with credit cards. Keep reading for some solid advice on how to best use your credit cards.
When making purchases with your credit cards you should stick to buying items that you need instead of buying those that you want. Buying luxury items with credit cards is one of the easiest ways to get into debt. If it is something that you can live without you should avoid charging it.
Don’t fall for the introductory rates on credit cards when opening a new one. Be sure to ask the creditor what the rate will go up to after, the introductory rate expires. Sometimes, the APR can go up to 20-30% on some cards, an interest rate you definitely don’t want to be paying once your introductory rate goes away.
To preserve a high credit score, pay all bills before the due date. Your credit score can suffer if your payments are late, and hefty fees are frequently imposed. One of the best ways to save you both time and money is to set up automatic payments.
Do not use one credit card to pay off the amount owed on another until you check and see which one has the lowest rate. While this is never considered the best thing to do financially, you can occasionally do this to make sure you are not risking getting further into debt.
Open and go over everything that is sent to your mail or email about your card whenever you get it. Card issuers have the ability to adjust fees and interest rates, provided they let you know about it in writing. If the terms are not ones that work for you, cancelling the card is an option.
Live by a zero balance goal, or if you can’t reach zero balance monthly, then maintain the lowest balances you can. Credit card debt can quickly spiral out of control, so go into your credit relationship with the goal to always pay off your bill every month. This is especially important if your cards have high interest rates that can really rack up over time.
Students who have credit cards, should be particularly careful of what they use it for. Most students do not have a large monthly income, so it is important to spend their money carefully. Charge something on a credit card if, you are totally sure you will be able to pay your bill at the end of the month.
As stated previously, credit cards can be quite useful, but they can also hurt us when we don’t use them right. Hopefully, this article has given you some sensible advice and useful tips on the best way to use your credit cards and manage your financial future, with as few mistakes as possible!