Credit cards are useful for online purchases and avoiding cash use. The piece that follows should be very useful for anyone needing to better understand credit cards and who wants to use them wisely.
Do not close any credit card accounts without finding out how it affects your credit report. Many times, closing an account leaves a negative mark on your credit record, and should be avoided, even if you do not plan to ever use the account again. It is also important to keep your major credit accounts active so that you do not lose a big portion of the credit history that you have built up over the years.
If you want a credit score that is good, be sure that you’re able to pay credit card payments before it’s due. Paying your bill late can cost you both in the form of late fees and in the form of a reduced credit score. Therefore, you should aim to set up a payment schedule that pays automatically with a bank or your card company in order to save both time and money.
To help be sure you don’t overpay for a premium card, compare its annual fee to rival cards. Depending on how exclusive the card is, a platinum or black card may carry a fee of $100 to $1000. The best bet is that if you do not need a premium credit card, avoid them and do not pay the fees.
The reason a credit card company will ask you to make a minimum payment is because they want you to pay this amount over time to make the most money off of you. Every dollar over your minimum payment goes to pay off your balance, so always pay a higher amount than the credit card company asks you to pay. This will help alleviate some of the interest over the lifetime of the balance.
This article should give you some idea about the responsibilities inherent in credit card use. We can never be too careful with our credit or spending and too often we realize the errors of our ways when it is too late! Follow the advice in this article to utilize the advantages of using a credit card, and also minimize the risks.
