Having a credit card can sometimes make you feel powerful, but you don’t want to feel your power draining from you when you get the bill! Read on to learn how to use your credit card correctly, so that you don’t end up in financial trouble after using the card.
It is wise to have two or three different credit cards available for your use. Having two or three cards will help you to improve your credit rating. Keep in mind though that if you have more cards than three, this could have a negative effect on your credit score.
Be safe when giving out your credit card information. If you like to order things online with it, then you have to be sure the website is secure. If you notice charges that you didn’t make, call the customer service number for the credit card company. They can help deactivate your card and make it unusable, until they mail you a new one with a new account number.
You need to be careful not to overspend, so you should track every purchase you make with your credit card and keep a running total. Noting down your credit card expenditures on paper or a spreadsheet will make you less likely to start spending money you cannot afford to repay.
Make sure you are fully aware of your card agreement’s terms. Most companies consider you to have agreed to the card agreement when you first use the card. Be aware of all of the “fine print” that comes with your credit card!
Always know what your utilization ratio is on your credit cards. This is the amount of debt that is on the card versus your credit limit. For instance, if the limit on your card is $500 and you have a balance of $250, you are using 50% of your limit. It is recommended to keep your utilization ratio of around 30%, in order to keep your credit rating good.
As a general rule, you should avoid applying for any credit cards that come with any type of free offer. More often than not, anything that you get free with credit card applications will always come with some sort of catch or hidden costs that you are sure to regret later on down the road.
Don’t write your pin or password down where others can see it. You must remember the number so that others can’t access your account. If you document your pin number, and keep it with your card, anyone can use it.
It should be obvious, but many people fail to follow the simple tip of paying your credit card bill on time each month. Late payments can reflect poorly on your credit report, you may also be charged hefty penalty fees, if you don’t pay your bill on time.
Paying off your credit card in full can help you keep that power going that you got, when you handed the card over at the register. After reading this article, you should know some things to do if you want to use your credit card responsibly. Credit cards are a wonderful thing when used correctly.