While credit cards are widely used around the globe, credit cards are also frequently misunderstood. Many myths persist about this common form of payment, so it's good to refresh your knowledge from time to time. That's why we are presenting our top credit card tips for savvy spending. Learn all about credit card basics, so you can shop wisely!
Credit Score
A credit card can help you build credit, as long as you use it responsibly. Be sure to check your credit score periodically to find out the state of your finances. There are plenty of online resources to check your score for free. You can also get a copy of your credit report in person to double check the accuracy. However, be careful about checking your score too often. This can deter potential lenders from working with you. If you pay your bills on time and avoid overdrawing your account, you're on your way to a great credit history!
Smart Shopping
When it comes to credit cards, more isn't more. We recommend starting with just one card with a low limit to establish a positive credit history. Examine your bills for accuracy and pay off the total balance every month. You may find it helpful to create a budget to spend within your means. Not only will you avoid depleting your bank account, but you'll also keep your credit score in good standing. If you need to get a new credit card, do your homework! Read the fine print carefully, because the terms may differ from your current lender. And consider negotiating for a better interest rate. While this doesn't work for every company, it doesn't hurt to ask!
Overcoming Obstacles
What if you dig yourself into a hole? Don't panic, roll up your sleeves! If you can't avoid a late payment, talk to the issuer and ask about your options. There may be a little wiggle room if you explain your situation honestly. You might look into options like cash advances and payday loans for extra cushion. Additionally, you should take inventory of your credit cards from time to time. Does every card have a purpose, or could you stand to downsize? Call the company to cancel any unused card and indicate that you want "Account closed by consumer" on your credit report. Don't forget to cut up the card when you're done!