It is never a bad idea to take good advice, particularly when bank cards are involved. Below are some tips that will increase your knowledge of bank cards and help you to avoid some common pitfalls. Many people who have bank cards do not have the knowledge needed to make wise choices. This can lead to big financial problems.
Try to keep at least two, but not more than three, credit lines open simultaneously. This will increase your credit score over time, especially if you don’t carry a balance from month to month. Keep in mind though that if you have more cards than three, this could have a negative effect on your credit score.
Never get rid of an account for a credit card prior to going over what it entails. Sometimes closing charge cards can leave negative marks on credit reports and that should be avoided. The card that makes up most of your financial history should not be closed.
In addition to avoiding late fees, it is wise to avoid any fees for going over your limit. Both of these are pretty large fees and going over your limit can put a blemish on your credit report. Be sure to never pass your credit limit.
If you have not yet established your own credit history, a co-signer can help you get your first credit card. A friend that you trust, a parent, sibling or anyone else with established credit can be a co-signer. They must be willing to sign stating they will pay the balance due on the card if you do not pay it. This can help you get a first credit card, and start building your own credit.
You don’t always want to get yourself a credit card as soon as you possibly can. Although this might be what most people do, you might need a few months to understand the basics of the credit industry before you use charge cards. Read further to gain some insight into the credit world.
Make sure the password and pin number of your credit card is difficult for anyone to guess. Common information like names, or birthdays are easy to guess and should be avoided.
If you’re not happy with the interest rate that you are being charged, ask the bank if they can change it. If, after speaking with a retention team member, you are still unable to get a reduction, start looking elsewhere for a better rate. Once you locate one, switch to a card company with better customer service.
When looking for a secured card, you should avoid prepaid cards. In reality, they are debit cards and don’t send reports to credit bureaus that might help improve your record. In addition, a number of them also charge additional fees, and they are really only another checking account. Lay down a deposit, and get a real secured credit card that will report to the bureaus and help improve your credit score.
It is important that you understand all the new laws governing credit cards. For example, a credit card company cannot increase your interest rate retroactively. You also cannot be billed twice in one cycle. Familiarize yourself with the laws. Recently, the FCBA and CARD Act were established.
Your credit rating is in real jeopardy if you pile up more credit card debt than you are capable of repaying. This can cause problems with other areas, such as renting a place to live, getting a loan for a car or even applying for a job.
Think about receiving an unsecured line of credit from a credit card company after you have been paying down a secured card reliably. Subsequently, you may start to receive offers by mail. That is when you need to enter decision-making mode once again, to re-evaluate your financial situation and needs.
If your credit cards have an interest rate that is higher than you feel comfortable with, talk to the company to see if it can be reduced. In a few cases, this will happen. You can save a lot monthly, now that you’re carrying a balance.
As you can probably see, it is very easy to get yourself deep in financial trouble by charging up charge cards. Having too many cards and making too many purchases can lead to disaster. Hopefully, you can use what you went over in this article to help you use your credit card more wisely.