Watch your Interest Rates

Many credit card users aren’t even aware that different interest rates exist at a single company. Some credit companies charge higher for cash advances, while others will charge punitive rates for late payments. Try to negotiate a rate that suits you and your spending habits by speaking to the company’s representative, and don’t be shy to be a little forceful when making a request for lower interest rates. You’d be surprised how much you can achieve with a little chutzpah! If you’re not happy with your rate you should look at cards offering intro balance transfer rates. This allows you to transfer the amount you owe to another company for a lower introductory interest rate. Some people consistently bounce from one lower rate to the next, however, this can have an effect on your credit score.

Curb Unnecessary Spending

This one requires a lot of willpower! Don’t fall prey to impulse buying. Paying with plastic is easy and hassle-free. Especially around holiday time, it is very tempting to go into a mall, buy all the great things you see and then push the payment issue out of mind by putting all expenses on your card. However, payment day will soon come around and you’ll find yourself saddled with a debt that leaves you in tears. There are certain things that you can do to avoid this scenario. If you need to shop for gifts, make a list and stick to it. If you are shopping for clothes, sort through your wardrobe first and decide exactly what you need. Don’t get sidetracked by great – but unnecessary – sale goods. If you find that you still cannot control your impulses, try to limit the use of your credit card to the basic necessities (food, gas, bills) and pay for clothing, gifts and entertainment in cash.

Pay your Bills on Time

Even if you are one day late in paying those bills, you’ll be slapped with late payment fees by your credit card company. Learn to pay your bills even earlier than the last date, even if you have to make use of a diary or calendar to remind you to do so.

Prove Your Worth

By paying your bills on time and not exceeding your credit amount, you will soon create for yourself an excellent credit record. Not only is this a good thing to have in other areas of life, but it will also prove to your credit card company that you are serious about financial management. When you have created a good enough record over a certain length of time, approach the company and ask for better terms on your card. In today’s world, where so many people abuse the credit line given to them, financial companies naturally value their good customers and will do all they can to keep them on board.

Monthly expenditures

Your monthly expenditures will appear as a list in a central block on the credit card statement. This is the itemized summary of your credit card usage since your last statement. It is essential to always check this section thoroughly, for two reasons. First of all, it is these expenditures that usually make up the bulk of the total amount owed, but more importantly, in a world where unfortunately credit card fraud can occur, you must always check that you are only paying for your owns purchases! It should be noted that payments made to your credit card company will appear in this section as a minus, whilst debits against your card will be positive making it an inversion of a regular bank statement.

Bill details

Usually above the itemized monthly expenditures but not necessarily, you will find a number of details pertaining to the bill itself and you the account holder. These again are important to check for your own records, as well as for the sake of good bookkeeping on your part and the company’s part. Information here will include the account number and holder name, which you must check are correct. You will then find a statement date and a payment date. The statement date tells you the period the statement covers, whilst the payment date, which is usually a couple of weeks later is the date by which the company must have received payment from you. The other pieces of information relate to the credit itself and should be explained individually.

Credit – this is the amount of credit that you and your credit card company agreed you may have.

Credit available – this is the credit amount you agreed on minus your current balance; what remains of your allowed credit.

New balance – this is the amount you owe the credit card company. If you don’t want to pay interest, this amount must be paid in full before the payment date.

Minimum payment – if you can’t pay the full amount, you must pay at least this much before the payment date. The minimum payment is usually between 2% and 4% of the total amount owed.

Balance Calculation

This is often a confusing part of the credit card statement, but if approached calmly makes perfect sense. Included in this section is a list of factors that contribute to the current statement total. Previous balances, monthly expenditures, and payments received will be listed as well as other factors such as finance charges, late charges, and cash advances to make essentially a sum that will determine your current balance.

Finance Charge Summary

This section, often at the bottom of the page, will highlight for you precisely the charges you will incur if you are unable to pay the complete amount of the statement off in one go. This section is essential to understand as it will make control of your finances that much more straightforward, and allow you to make an informed decision when it comes to the payment of your credit card bill. Information in this section will include the APR of your card, but will also detail different charges you incur which may vary between types of payment; e.g. cash withdrawal may come with different interest than a direct payment.

Grace Period

This timespan allows no interest to be charged if you pay your bill in full.