I would like to start by mentioning that, I never paid a late fee or interest while using credit cards. I earned $1000’s in rewards and cash backs so far. This goes on to prove that wise use of cards can help you financially while providing all the ease of using card vs. cash.
Credit cards can apparently seem to be convenient for the consumers. But the susceptible consumers are exposed to high risks due to bad spending habits as they spend more than they can afford. A considerable number of US consumers have multiple credit cards, and each card has a large amount of outstanding dues on it. So, the debt stricken consumers opt for credit card debt settlement programs to pay off their owed amount.
The cardholders should get a formal training on personal finance management. This will help them to behave responsibly towards their finances and avoid debt that will lead to build a good credit score.
The consumers should remember that handling credit in a prudent way can make them economically cautious and can avoid associating with frauds.
Here are the 3 basic tips to keep in mind before an individual decides to apply for a credit card
Check for hidden costs
The consumers should be aware of the hidden cost that can be overwhelming in the long run to pay off. Before applying for the card, the applicant should ensure that the charges levied on the card are nominal. Information on late fees, credit card over-limit fees and lost card replacement fees should be acquired from the credit card company. Before getting a card one should get detailed information on charges levied on the card. These information guides the consumers to take an appropriate decision and safeguard their financial future.
Building good credit:
In order to build a good credit score, the card holder should ensure that he should remember the following points:
* Avoid default on payments
* Make payments on outstanding balance
* Keep the balance low than the available credit limit
* Avoid closing the old accounts
Acquire information on rights bestowed on the consumers
An individual can apply for a card once the person attains the age of 18 years irrespective of your background, gender, marital status, religion or national origin. A card holder is eligible to get a free copy of his credit report once in a year. He can also report theft of the credit card with the company if your card is stolen. The card holder should make sure that he does not have to pay for the bills if someone misuses his card after theft.
Here are a few tips that a card holder needs to keep in mind while using credit cards
- The card holder should opt for a card that proves to be beneficial for his financial situation. It is important for him to scrutinize the terms of services of the card and try to comprehend how a person can utilize the card in the best possible way.
- The card holder should formulate a budget plan as it helps to avoid frequent use of the card. Credit cards lure the card holder to spend recklessly but a budget plan can help him avoid the perils of debts. Pay off the monthly bills on time as default on payments can blemish the credit report of an individual.
- The card holder needs to keep a track on the offers provided by the credit card companies. Therefore, he should keep a check on his monthly statements thoroughly. The cash-back or reward offers available on the credit cards will help him to enjoy better value for money.
- The card holder should avoid exceeding the card limit as that can complicate his fiscal situation. He should only spend the amount that he can afford otherwise he might sink in debt.
Remember, building a good credit score by using your credit card wisely can help you to achieve long term financial goals. So, use your card sensibly to retain you financial independence and avoid the trap of debt.
Readers, do send your opinion about this post and your personal experiences on using credit card successfully by commenting below.