Thursday, September 22, 2011

10 Credit Card Tips

Credit cards have always been a bit of a financial hot topic over the years. From debt accumulation to life styling choices, they seem to pop up everywhere. In fact, credit cards are really an integral part of the way we live, like it or not.
The key with any financial lever, such as a credit card, is how you manage it. It should be done properly and there are a few tips you should pick up on to do it properly and efficiently.
First of all, don't get a card just to try and get the benefits such as rewards, cash back or air miles. That's a recipe for disaster, as inevitably they are not as competitive as many without these fringe benefits.
Pay off your bill in full every month. If you can't pay it all off, then pay as much extra above the minimum payment as possible. Just paying the minimum will mean more interest and even longer to pay it off.
Don't feel obliged to stick to one credit card company. If you can, get a better deal with a long introductory zero percent offer change and start really hitting those repayments whilst you can.
Shred credit card statements and receipts properly, sign a new or replacement card immediately, never write down your PIN number and look for the padlock symbol on websites to make sure they are encrypted properly.
Always check your statements carefully. Make sure there is nothing on there that shouldn't be and that there are no additional charges sneaked in at all. Challenge it immediately if you feel that it is incorrect. Don't just sit on the problem.
Always make sure that you pay any instalments on time. The late penalties on most cards are very high. This will get added to the balance and gain interest as well. The best bet is to set up a direct debit.
If you have a good habit of clearing your card, then if you want, there are many ways of making charitable donations via your credit card. Alternatively, you may want to consider some of the introductory offers and whether they will benefit you if you switch.
Never use a credit card to pay for standard household bills such as food unless you clear your balance each month. You could end up paying as much as 10 years' interest on those purchases. Food is expensive enough without it becoming a debt.
A credit card is not an alternative to cold hard cash. If you start thinking like this, it won't be long before the balance is out of control and you are deep in debt.
The credit card limit is not a target to aspire to, but should a financial restraint. If your card company keeps raising it, then ring them up to ask then to drop it again. Sometimes that extra is just too tempting. Remove the temptation.
Make sure you keep an eye on the APR and on any correspondence you receive. Card companies have a habit of quietly raising rates little by little over time until they are high and you may not notice.
If you are already in debt, then do not use a credit card to pay off that debt. It is an emergency or temporary funding device, not a loan.
Remember that a credit card is linked to your credit record. Its actions and problems could damage your rating for important things such as mortgages. By creating bad credit credit cards can seriously damage your prospects.
If you have bad credit credit cards can be supplied, but the rates of interest should be looked at carefully as they could make things worse.

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