Credit cards can be a blessing or a curse depending upon how you manage to use them. The key is to not view them as free money because as we all know, they aren’t. In fact, look at them as a bill that if not respected sucks more money out of your checking account that should have remained in your pocket.
The good news when it comes to credit cards is that we truly are in control. We can choose to dip our toes into the waters of self-inflicted debt, or we can, with great gumption and strength, walk away from those gorgeous peep-toed pumps that later will cause us to be grateful and stress-free as we don’t have to worry about an exorbitant bill coming to our mailbox.
With anything, we must be educated on how to successfully use a credit card because the reality is, it is actually okay to have one. In fact, if you are going to need to have your credit score checked for anything, you will need to have one line of credit.
The most important thing to keep in mind once you are aware of the power of credit cards is to remain responsible and financially savvy of your current budget situation. Here is a list of things to keep in mind in order to successfully carry a credit card. Please feel free to add any tips or advice that you have found to be successful.
*Only carry one credit card to your name
*Shop around before choosing the best card
*Know the terms of your card. (Interest rate, penalty charges, credit limit, etc)
*Don’t choose a card for the perks. By doing this you won’t have to pay an annual fee.
*Maintain a good credit rating. How? Pay your card in full each month. If this isn’t possible, keep your amount owed to 30% of your credit limit. Your credit rating takes this number into account when determining your score.
*Always pay more than the minimum payment (unless you are in the process of paying off a higher rate credit card, in which case, pay the minimum until the higher rate card is paid off, then increase your monthly amount.)
*Never use cash advances. Upon receiving them in the mail, shred them immediately.
*View your credit card as an extension of your checking account. If you can’t pay it off by the end of the month, don’t use it.
*Don’t buy things you can’t afford. The likelihood that you’ll be able to pay it off later is rare if you can’t afford it now. Remember financial security is the foundation of a better life and the beginning of peace of mind.
*Protect your credit cards and account numbers to prevent unauthorized use. Draw a line through blank spaces above the total when you sign receipts.
*Read the credit card statement each month. Check each of the charges and make sure they are yours. If you see a charge that is not, contact your credit card provider immediately and dispute the charge.
*Keep a list of your credit-card numbers and the telephone numbers of each card issuer in a safe place in case your cards are lost or stolen.
*Make your payment on time. Paying online is simple and secure. There are also many alerts you can set up to remind you when your statement becomes available.
*Understand that the mishandling of your credit card can result in the inability to take out a loan to buy a house, a car, begin a business, etc. Good money management takes disciplined decision making, but by remaining disciplined, life is yours to create. Take control of your money and refuse to allow it to control you.
*Before closing a credit card, be sure you know how it will affect your credit score. It is best to have one credit card and maintain it properly so that lenders realize you can handle the responsibility which is reflected positively in your credit score. If you have no lines to credit, often this has a negative effect on your score.
*Be willing to negotiate for a better rate. If you are a credit card holder in good standing, make a habit once a year of negotiating a better rate based on your ability to be a reliable customer who pays their bills on time, etc. If the customer representative on the line can’t help you, ask nicely to speak to a manager or supervisor.