Credit Cards and Your Credit Rating
Today, more than ever, having good credit is essential in these tough economic times. Credit card companies are becoming more stringent on who to pre-approve for their credit cards and those who are able to handle a credit card responsibly are those most likely to be in good standing with these companies. Knowing how to use your credit card responsibly is important in having good credit.
Since credit cards are plastic and look nothing like money, it may be easy to spend it without thinking of the consequences of paying it later. Two essential responsibilities if learned can help in being responsible with credit cards. The first is to remember to pay all of your credit card bills ON TIME. There are now many ways to set up a set schedule that automatically pays for one's bills before the due date. Another important thing to remember is to not pass your credit card limit. However, in any case, your bill should not even be close to reaching its limit. The rule of thumb is to leave at least 20% of space between your charges and your credit card limit.
Applying for a credit card when your credit hasn't been so great in the past may prove to be a bit difficult. Although it is possible, you would like to set yourself up to have a better chance at being approved. Even if you have bad credit now, you have ways to increase your credit as well as your chances in getting approved for a new credit card.
One of the many reasons why most card holders are trapped in a credit card debt its because they have this overwhelming stack of credit card in their wallets. Whats with having so many credit cards when in fact it can only do you harm than good.
If you believe you have too many credit cards for your own good right now, the best thing is to cut up with ones you don't need. Do not necessarily cancel or close the account but just physically cut the plastic card. It would be wise to have a credit cards from different issuers such as AmEx, Visa, and Mastercard so you have flexibility and versatility when leaving home.
Credit card companies raise their interest rates during peak times of the year (during holidays) which is unbeknown to most people. Credit card issuers do this on purpose because they know this is the time most people put purchases on their credit cards. It would be wise to only use credit cards when you have to most and to use cash when possible, to avoid those high interest fees.
Using cash when possible is another good way to avoid bad credit card habits. When you use cash, you'll have the peace of mind that there are no bills to be billed to you later on and that your purchase has already been paid for. Reward points do sound enticing, but remember credit card companies offer these reward for a reason. Their main goal is to make money, not to save you money. It is best to remember these tips the next time you whip out that plastic.
Since credit cards are plastic and look nothing like money, it may be easy to spend it without thinking of the consequences of paying it later. Two essential responsibilities if learned can help in being responsible with credit cards. The first is to remember to pay all of your credit card bills ON TIME. There are now many ways to set up a set schedule that automatically pays for one's bills before the due date. Another important thing to remember is to not pass your credit card limit. However, in any case, your bill should not even be close to reaching its limit. The rule of thumb is to leave at least 20% of space between your charges and your credit card limit.
Applying for a credit card when your credit hasn't been so great in the past may prove to be a bit difficult. Although it is possible, you would like to set yourself up to have a better chance at being approved. Even if you have bad credit now, you have ways to increase your credit as well as your chances in getting approved for a new credit card.
One of the many reasons why most card holders are trapped in a credit card debt its because they have this overwhelming stack of credit card in their wallets. Whats with having so many credit cards when in fact it can only do you harm than good.
If you believe you have too many credit cards for your own good right now, the best thing is to cut up with ones you don't need. Do not necessarily cancel or close the account but just physically cut the plastic card. It would be wise to have a credit cards from different issuers such as AmEx, Visa, and Mastercard so you have flexibility and versatility when leaving home.
Credit card companies raise their interest rates during peak times of the year (during holidays) which is unbeknown to most people. Credit card issuers do this on purpose because they know this is the time most people put purchases on their credit cards. It would be wise to only use credit cards when you have to most and to use cash when possible, to avoid those high interest fees.
Using cash when possible is another good way to avoid bad credit card habits. When you use cash, you'll have the peace of mind that there are no bills to be billed to you later on and that your purchase has already been paid for. Reward points do sound enticing, but remember credit card companies offer these reward for a reason. Their main goal is to make money, not to save you money. It is best to remember these tips the next time you whip out that plastic.
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posted by Credit Counseling at
9:16 AM
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