The Four Rules of Owning A Credit Card
Anybody who owns a credit card knows the many advantages of using one. Nothing beats a credit card when it comes to convenience, ease and peace of mind when paying for an item. Unfortunately, however, some people have not mastered the art of using a credit card correctly and suddenly find themselves in insurmountable debt. We outline the ultimate tips so that your credit card becomes a pleasure and not a punishment!
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.