Sound Advice For First Time Credit Card Users
If you are just entering the world of credit cards, there is important
information you will need to know in order to manage your credit and your
finances effectively. Establishing good habits and a good credit history
now is the foundation for a solid financial future. Applying for a credit
card in your own name can help you establish a sound credit history and
will be a valuable asset in applying for a loan for a home, new car, or
getting a new job or apartment. In addition, there is no safer way to make
purchases online or over the phone than with a credit card.
Along with the benefits of having credit cards, comes added
responsibility. If you misuse your credit cards or fail to take
responsibility for your spending habits, you could end up in serious
financial trouble. Learning how to choose the credit card that is right
for you is your first step. There are numerous credit card offers from
which to choose, and it can be confusing to know which is the best one for
you. Do not choose a credit card simply because of a low introductory rate
or generous rewards. A low introductory rate will increase sharply when
the introductory period is over, and many times these types of cards have
annual fees and additional costs that are not made clear in the initial
offer.
Know the terms of your contract with the credit card company. Interest
rates and late fees can cause your balance to rise considerably and making
the minimum payments will not help you pay off your credit card debt. If
you make a lot of purchases with your credit card, it will be necessary
for you to pay your entire balance each month if you want to avoid
additional fees. Some credit cards raise your interest rate if your
balance exceeds a certain amount, and will charge you numerous late fees
and other miscellaneous charges if you exceed your credit limit, even if
the reason you are over your limit is due to fees and penalties.
You should know exactly when you will be billed each month and prepare to
send your payment in several days before the due date. Late payments will
result in additional fees and could reflect badly on your credit report.
Even if you plan to make your payment online, plan to do so at least 5
business days before your bill is due to avoid any possibility of late
payments. It is very tempting to use your credit card for cash advances.
You should avoid cash advances except in the case of emergency. Cash
advances generally come with a higher interest rate than regular purchases
and you will be charged an additional fee for each cash advance. Even if
your interest rate is relatively low, the rate you are charged for amounts
resulting from cash advances can be significantly higher.
Be very careful about how and when you use your credit cards. Never loan
your credit card to friends and make sure you protect your card at all
times. Identity theft and credit card fraud are major problems. You will
need to take the appropriate safety precautions to avoid either of these
situations. When your monthly statement arrives, make sure you have kept
all of your receipts and check your receipts against your bill. If you
find any errors, report them immediately to your credit card company. You
can learn to manage your credit wisely by practicing good credit habits
now. Credit cards are almost a necessity in our society, but in obtaining
credit you must learn good spending habits and make smart financial
decisions.
This article has been provided courtesy of Creditor Web. Creditor Web
offers great credit card articles available for reprint and other tools to
help you search and compare credit card offers
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