Many people think all credit cards are the same, but this is not true. Credit cards can have different limits, rewards, and even interest rates. Selecting the right credit card takes a lot of thought. Here are some tips that will help you select the right credit card.
When you are unable to pay off one of your credit cards, then the best policy is to contact the credit card company. Letting it just go to collections is bad for your credit score. You will find that most companies will let you pay it off in smaller amounts, as long as you don’t keep avoiding them.
Carefully consider those cards that offer you a zero percent interest rate. It may seem very alluring at first, but you may find later that you will have to pay sky high rates down the road. Learn how long that rate is going to last and what the go-to rate will be when it expires.
A key credit card tip that everyone should use is to stay within your credit limit. Credit card companies charge outrageous fees for going over your limit, and these fees can make it much harder to pay your monthly balance. Be responsible and make sure you know how much credit you have left.
Avoid purchasing items out of your budget with your credit card. Credit cards should not be used to buy things that you want, but don’t have the money to pay for. You will end up being charged lots of interest and you may be unable to keep up with the monthly repayments on your credit card. Go home to mull it over for a couple of days and then reach a rational decision. If you do decide to make the purchase, see if the store offers financing that is usually lower interest than your credit card.
Never leave blank spots when you sign retail store receipts. Draw a pen line through the “tip” area, so that an employee cannot write something in the space and give themselves a tip. To ensure that no one has been adding any false amounts, stay on top of your monthly statements, making sure they match your receipts.
Don’t open too many credit card accounts. A single person only needs two or three in his or her name, in order to get a good credit established. More credit cards than this, could actually do more damage than good to your score. Also, having multiple accounts is harder to keep track of and harder to remember to pay on time.
It is wise to refrain from giving a credit card to a child. It is best to let children wait to get credit cards until they reach the age of 18, or when they can get their own. Instead, consider opening them a checking account and giving them an allowance. This will help them learn to manage a small amount of money so that they will be ready to manage a credit card when the time comes.
Now that you realize that all credit cards aren’t created equal, you can give some proper thought to the type of credit card you might want. Since cards differ in interest rates, rewards, and limits, it can be tough to choose one. Luckily, the tips you’ve received can help you make that choice.