10 Useful Tips for Using Credit Cards

We can never be too careful when it comes to using credit cards. I have shared 10 Bad Credit Card Habits and How to Avoid Them, and 4 Good Reasons You Should be Using Credit Cards. So now that you know the good and bad, here are 10 awesome tips to using them the right way! Tip#1- Be aware Always know the balance of your credit card, and where you are at with your finances. This shows financial responsibility which is crucial in owning a credit card. This way you will never be surprised by an over due balance. It also protects you against CC theft…if you are constantly aware then you will know immediately if a charge goes onto your card that you did not make. Tip #2- Pay off your balance every month There are sometimes emergency situations where we have to charge our credit card with money we may not have…like medical bills for example. Besides those extreme cases you should not ever charge the card if you do not have the money to pay it off at the end of the month. This is where the trap of credit card debt, and ever rising interest happens. Tip #3- Never miss a due date There are a few things that you can do to help you with this one….if your due date comes on a bad day of the month then switch it! Maybe to the day after you get paid, or another day that works better for you. Another option is setting up automatic pay..now you only want to do this if you know you will have money in the account that is paying it off otherwise you’ll get charged overdraft fees. Figure out whatever you need to to make sure you get that payment in on time! Tip #4- Be aware of your own limits You don’t have to tempt yourself if you know that it will be difficult to make the right decision. Just because you can have a $10,000 limit on your credit card doesn’t mean that you have to! If keeping it small is better for you then do that! If it’s hard not to charge random “wants” then don’t carry it around with you all the time. I don’t know what your limits are, but you do. Having them isn’t a bad thing…..ignoring them is! So find ways to use your credit cards according to your limits and what works for you. Tip #5- Pay off debt It’s an unfortunate reality that a good portion of you reading this have some sort of debt, that doesn’t mean you are a horrible irresponsible person, it just means you should have a goal to pay it off! Try to pay more than just the minimum monthly payment, but make sure that you are at least paying that. I know it seems like a never ending road to be debt free, but I promise you can get there…set a goal, and make realistic plans that may need some sacrifice, but it will be well worth it! Tip #6- Find a rewards card There are lots of them out there, so figure out which one is best for you. It’s okay to have more than one, but be aware of signing up for too many credit cards. Rewards cards often have super high interest rates, so be sure to use them only if you pay off the balance each month. If you are smart though, they can really pay off and earn you free stuff! Tip #7- Don’t exceed 30% of your credit limit This will help your credit score go up. For example if you have a $1,000 credit card limit then you shouldn’t exceed a balance of about $300. This applies to all of your credit as a whole though…it’s not for each card…so if you have 3 credit cards with a total limit of $10,000 and you have a balance of $3,000 but it’s all on one card….that’s okay because it’s still only 30% of your available credit. Tip #8- Learn about card benefits Most credit cards have benefits that you don’t know about, so research the cards you have and find out what they are and use them to your advantage! Tip #9- Use it to benefit your budget Use your card for all of your purchases throughout the month, this way you can track all of your expenses and know exactly where all your money has gone. This is only a good idea if you know that you can stick to your budget and spend only what you are supposed to so that you have enough to pay it off each month. Tip #10- Be aware of hidden fees This goes for all fees associated with your credit card, but I want you to especially focus on this when traveling outside the country. Find out if you are going to be charged extra fees each time you swipe your card and what they are for. Don’t just assume that every credit card will work the same, do your homework and make sure that YOU are the one in charge NOT the credit card company.
10 Useful Tips for Using Credit Cards

10 Bad Credit Card Habits and How to Avoid Them

I talked about some of the benefits of credit cards in a recent post, but now I want to go over the dangers. Credit cards have their place and can make life simpler and give you great rewards if you use them correctly.  Just be sure that you are disciplined and know the credit card pitfalls so you can avoid them. Here are 10 credit card habits that can be bad for your pocketbook. 1. Charging Everything to Your Card I will be the first to admit that shopping with a credit card is by far the easiest way, but it’s also the most dangerous. Whenever you are shocked by your bills at the end of the month it’s almost always because you spent more money than you expected or had budgeted.  Be sure to have a budget, and know exactly what is going on the credit card, and keep track of your expenses. That way at the end of the month there will be no surprises when it comes time to pay off the balance.  Charging everything to your card each month can work for some, but not if you aren’t careful. 2. Late Payments Or, the credit card trap! You don’t need to be spending extra money for no reason, but any time you skip a payment or forget to pay it on time that is exactly what you are doing. Don’t allow the credit card companies to charge you interest.  It’s a good idea to set reminders, or set up automatic bill pay so that you can never miss a payment by mistake.  Not only are you charged a late charge, and interest if not paid on time, but most credit card companies will raise the interest rate on your card if you are late making payments.  It will continue to cost you more and more money.  Be punctual with those payments! 3. Having Too Many Credit Card Accounts If you have too many open credit card accounts you may forget which cards have a balance on them, or what you need to pay off. Too many open lines of credit can also harm your credit.  Credit cards are a great way to build your credit score and history, but be selective in the cards that you have.  For best results, use them to show activity on them, and then pay them off. 4. Not Reading Your Statements Be on top of that statement and know exactly what every charge is for. This way you can easily detect if there are any mistakes, or expenses that you didn’t make. I have been double charged by businesses and also had fraudulent activity on my credit cards in the past, so it is important to watch those statements.  It will also help you be aware of your spending and know exactly where your money is going. 5. Making Only Minimum Payments  If you are only making minimum payments on your credit card, you may never get them paid off.  Credit cards are designed to make the CREDITOR a lot of money, not you.  If you are only paying the minimum payment, and consistently using your credit card, it may be hard to climb out of your credit card hole.  Be careful to pay off the balances each month, if you can.  If you can’t, try to budget how much extra you can pay each month to bring the balance down as quickly as possible.  You will pay a lot more interest than you should if you just pay minimum payments each month. 6. Using Your Credit Card for Unnecessary Purchases Your credit card should be used wisely and when needed not for your random “fun” purchases. The best way to keep unnecessary purchases under control is to decide how much each month can be used for “extras” then take out that amount in cash. That way you know that you aren’t spending too much money on things that you really didn’t need to buy. 7. Buying Things You Can’t Afford This can go along with #6, but is a little different. It is probably the worst credit card habit.  If you don’t have the money…DON’T BUY IT. No questions asked. It is too easy to charge a big amount to your credit card, and think “I’ll pay it off eventually”. This is the credit trap. You don’t want to rack up credit card debt this way…especially if a real emergency happens, such as medical bills, and then you really have no way out. 8. Maxing Out a Credit Card Believe it or not, having maxed out credit cards hurts your credit score.  The best way to keep your credit score high, is to never let the balance stay over half of the available credit limit.  Keep your debt to available credit ratio at less than 50% or it can negatively affect your credit score. You always want to have more available to you than what you owe. 9. Using it for a Cash Advance Are you low on cash? Taking a cash advance from a credit card may be tempting, but it is very costly.  Be sure to read the terms and conditions.  In most cases, there is a cash advance fee, and a high interest rate for cash advances.  Also, the cash advance interest rate begins accruing immediately (daily), and not after the statement.   It is expensive money, so unless you have no other options, cash advances are not a “smart money move.” 10. Letting Other People Use Your Credit Cards Whether it’s family or friends you trust every transaction is being linked to you, so if for whatever reason they can’t pay you back that amount in time then it will be shown on YOUR credit report and history.  Be careful and don’t trust others with your credit.

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