Credit card purchases can yield perks such as frequent flyer miles or other discounts, if used properly. Other people who don’t use their cards wisely charge their vacation expenses to their credit cards and come home having a stressful bill. If you would like to be among the first camp, read on for some ideas on how to get the best credit cards and use the ones you have wisely.
Make sure you have the money to pay for any charges you make on your credit cards. It is acceptable to use your credit to make purchases that you will be able to pay off later, but do not make large purchases that could put you in a financial bind.
It’s a smart practice to have 2 or 3 open credit cards in good standing. You can improve your credit score by managing these cards responsibly, especially if you keep from carrying month-to-month balances on the cards. However, if you have over three, a lender may think that looks bad when pulling up your personal credit bureau report.
Always track your credit card purchases, so that you do go over budget. It can be easy to spend more on your credit card than you intended, so make the decision to keep a total on a spreadsheet or in a written record.
Learn how to responsibly handle your credit card accounts. While it’s understandable that some people get into debt from a credit card, some people do so because they’ve abused the privilege that a credit card provides. Ideally, you should pay off your balance in full every month. That way, you can improve your credit score and lower your balance simultaneously.
To help be sure you don’t overpay for a premium card, compare its annual fee to rival cards. Certain exclusive cards charge annual fees upwards of $1,000. If you do not need a card that is exclusive, don’t get one. This way you will avoid the fees.
Credit card companies calculate their minimum payments so that you can pay a small amount and let them earn a large amount of interest from you over time. Always pay as much as possible in excess of the minimum payment. By doing this, you will avoid paying high amounts of interest that can really add up in the long run.
With any credit card debt, you need to avoid late fees and fees associated with going over your credit limit. Both of these are pretty large fees and going over your limit can put a blemish on your credit report. Be very careful to never spend above the limit on your credit card.
You can benefit from a credit card even if it does not offer you any type of rewards. People who don’t use their credit cards in a healthy manner will end up suffering high amounts of stress in the future. Use what you have learned from the tips above to help you to become a happy credit card owner.