Use Credit Cards Wisely

Once you have decided which credit card is right for you there are some tips you can follow to use your credit card wisely.

Tips to follow:

• Know and understand the terms of your agreement and pay your credit cards statements accordingly.
• Pay online. Consider paying your credit card statement online or over the telephone to avoid late payment charges. Being late with your payment may damage your credit record as well as your credit score. Also, depending on the terms of your agreement being late with just one payment could trigger a steep increase in your interest rate.
• Keep balances low. The limit on your credit card is not additional cash in the bank. If possible, when you make a purchase using your credit card do not charge anything more until you have paid off your account balance. If you do maintain a balance on your credit card always pay more than the minimum amount due so you can pay off the card faster.
• Cancel unnecessary cards. Cancel the credit cards you most recently acquired and do not use. They contain the least amount of positive credit history.
• Read all important information. Review the documentation that is included with your monthly billing statements. They may be notices of changes in the terms of your credit agreement. These changes will almost certainly be good for the card issuer and not for you. Other notices may inform you of your right to deny the credit card company’s ability to share your personal and financial information with other companies, and provide instructions on how to opt out.
• Do not skip payments. Do not take advantage of skip payment offers. You may be charged interest on your outstanding balance for the month you don’t make a payment.
• Do not go over your credit limit. Exceeding the limit or coming close to it may damage your credit history and lower your credit score.
• Do not take cash advances. This is a very costly source of funds. The interest rate applied to a cash advance may be considerably higher than the one applied to your purchases.
• Do not buy credit card insurance. This type of insurance pays your credit card debt if you become disabled or deceased. It tends to be very costly.