The Do’s & Don’t’s For Credit Card Users – Part 1

Credit Cards 0 10

Credit cards usually are associated to borrowing, spending and big interest rates. However, if used well, there are lots of benefits to having a credit card. Continue reading to learn the many benefits of credit cards, as well as how to avoid their many pitfalls.
 
A retail card should only be opened if you really use that store often. Every credit inquiry impacts your credit score, even if you do not end up getting the card after all. Too many retail store inquiries will cause a hit to your credit score.
 
Whenever you can manage it, you should pay the full balance on your credit cards every month. In an ideal world, you would only charge what you could comfortably afford in cash. When you keep balances off your cards, you avoid interest and other finance charges. Making use of the cards helps build up your credit score, too.
 
Keep a close eye on your credit card balance. Also know your current credit limit so that you avoid exceeding it. Going over this limit will result in greater fees incurred. It will take much longer for someone to pay their balance down if they exceed their limit consistently.
 
Do not use your credit card to purchase things you simply cannot afford. The fact that you desire a new television is not sufficient justification for charging it on a credit card. It costs a lot of interest, and that makes monthly payments pretty much impossible. Exit the store and mull over your purchase for a couple of days before making your final decision. If you still want the item, see if the store offers in house financing with better rates.
 
If you don’t have a secure mailbox, don’t order credit cards by mail. Many people that steal credit cards have admitted that they have stolen cards that were delivered and placed in mailboxes that did not have a lock on them.
 
Keep track of your credit score. Most creditors think of 700 as the lowest number you can have while still being considered to have good credit. Wisely use your credit in order to maintain this level or to reach this level if you aren’t this high yet. When your score is 700 or more, you will receive the best offers at the lowest rates.
 
When looking for a secured card, you should avoid prepaid cards. This is because they are classified as debit cards, so they will do nothing to help your credit score improve. Many prepaid cards charge extra fees and they are really just a checking account. Put down a deposit and get yourself an actual secured credit card so that it reports to the credit bureaus, improving your score.
 
Keep a credit card account open for as long as you can, this is very important to remember. Avoid closing out one account to open another, unless it is essential. Length of account history directly affects your credit score. Another element to establishing credit is to maintain and keep you credit accounts open and active at all times.
 
Your credit rating is in real jeopardy if you pile up more credit card debt than you are capable of repaying. Damaging your credit can make it difficult to get insurance, finance a car, rent an apartment or even get a job.

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