Use your credit cards wisely
For many people, managing a credit card is harder than getting one.
Understand that any time you use a credit card, you are borrowing money. If you don't pay off your balance each month, interest will be added to the total amount you owe.
Think before getting your first credit card. Think very carefully before you decide to get your first credit card. Do you really need a credit card or would another option work just as well? Some other options to think about:
Getting a debit card, which is connected to your checking or savings account rather than borrowing money for each transaction.
Considering sharing a card with your parents and asking them to help you stay on track.
Waiting. Just put off the decision for six months or a year and see how well you might do without a credit card.
Choose wisely. When selecting a credit card, you should shop around for the best deal. Compare different cards based on your own situation. Look for the following:
A low annual percentage rate (APR). The lower the rate, the less interest you have to pay. Watch out for low introductory rates that are raised after a year or less.
The interest calculation method. This affects how much interest you pay, even when the APR is identical.
Low or no annual fees. If the issuer charges an annual fee, ask them to waive it.
All other charges (i.e., late payment fees, transaction fees, over the limit fees, etc). These can really add to the total cost of your charges.
A grace period. Some credit cards charge interest from the day that the charges appear on your account. Other cards offer a grace period for you to pay off your balance before interest charges begin to accrue.
The credit limit. Keep your credit limit low (think about $500 or less), to make sure you don’t get in over your head.
Wide acceptance. A major credit card is convenient, and easier to manage.
Services and features, such as cash rebates, frequent flyer miles, extended warrantees, etc. Think carefully about the true cost of these programs when you consider interest and other charges.
Limit the number of cards you get. It will be easier to keep track of your spending.
Track your spending. Waiting until your statement arrives once a month to think about your balance can get you into trouble quickly.
Check your account online frequently.
Save receipts.
Maintain a ledger.
Consider signing up for balance notices and billing statement notifications from your credit card provider.
For each of your cards, keep a record of the following in case your card is lost or stolen. Even better, keep a photo copy of the front and back of your card in a safe place at home.
Account number
Issuer’s name
Phone number
The bottom line: Don't spend more than you can afford to pay on a monthly basis. Wise use of your credit cards will help you establish a solid credit rating and avoid financial problems.
For many people, managing a credit card is harder than getting one.
Understand that any time you use a credit card, you are borrowing money. If you don't pay off your balance each month, interest will be added to the total amount you owe.
Think before getting your first credit card. Think very carefully before you decide to get your first credit card. Do you really need a credit card or would another option work just as well? Some other options to think about:
Getting a debit card, which is connected to your checking or savings account rather than borrowing money for each transaction.
Considering sharing a card with your parents and asking them to help you stay on track.
Waiting. Just put off the decision for six months or a year and see how well you might do without a credit card.
Choose wisely. When selecting a credit card, you should shop around for the best deal. Compare different cards based on your own situation. Look for the following:
A low annual percentage rate (APR). The lower the rate, the less interest you have to pay. Watch out for low introductory rates that are raised after a year or less.
The interest calculation method. This affects how much interest you pay, even when the APR is identical.
Low or no annual fees. If the issuer charges an annual fee, ask them to waive it.
All other charges (i.e., late payment fees, transaction fees, over the limit fees, etc). These can really add to the total cost of your charges.
A grace period. Some credit cards charge interest from the day that the charges appear on your account. Other cards offer a grace period for you to pay off your balance before interest charges begin to accrue.
The credit limit. Keep your credit limit low (think about $500 or less), to make sure you don’t get in over your head.
Wide acceptance. A major credit card is convenient, and easier to manage.
Services and features, such as cash rebates, frequent flyer miles, extended warrantees, etc. Think carefully about the true cost of these programs when you consider interest and other charges.
Limit the number of cards you get. It will be easier to keep track of your spending.
Track your spending. Waiting until your statement arrives once a month to think about your balance can get you into trouble quickly.
Check your account online frequently.
Save receipts.
Maintain a ledger.
Consider signing up for balance notices and billing statement notifications from your credit card provider.
For each of your cards, keep a record of the following in case your card is lost or stolen. Even better, keep a photo copy of the front and back of your card in a safe place at home.
Account number
Issuer’s name
Phone number
The bottom line: Don't spend more than you can afford to pay on a monthly basis. Wise use of your credit cards will help you establish a solid credit rating and avoid financial problems.
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