Credit Cards
The use of credit cards has become so common over the past two decades that nearly every American has multiple cards in his or her wallet. There is no doubt that credit cards can be extremely convenient for several reasons. Of course, using these handy little pieces of plastic responsibly is very important. It's easy, too. Take the following suggestions into consideration, and you can protect your credit rating and your peace of mind.
Applying for the Right Card:
Most of us are inundated with credit card offers in the mail. At best
these offers are a waste of paper, and at worst they are just a bad deal.
Make sure you read through all of the fine print and that you understand it
thoroughly before applying for any credit cards.
Comparing Interest Rates:
When applying for a credit card, always try to pick one with the most
competitive interest rate for which you can qualify. Double check to see
how long the interest rate is effective, as some credit cards will offer a
great introductory rate but will then switch it to a much higher rate after
the introductory period has ended.
Considering the Annual Fee:
Some credit card companies will charge a fee for allowing you to use their
card. The annual fee can vary quite a bit, so be sure to compare and choose
from credit cards that expect a low (or even no) annual fee.
Making Timely Payments:
Paying your credit card bill on time is vital for several reasons. First
of all, not doing so will incur a late fee, which can be very hefty for
some credit cards. Late payments will also get reported to the credit
bureaus and will affect your credit rating and credit score. Finally, a
late payment will often significantly increase your interest rate for the
rest of the life of your account.
Controlling Your Balance:
Keep a reasonable balance on your credit cards if you are not able to pay
it off in full. Exceeding your limit will not only cause you to get charged
an over-the-limit fee, but it will likely cause your interest rates to
rise.
Credit cards are incredibly useful, but they are also a big responsibility. Follow these suggestions to keep yourself--and your credit score--in order. When you receive an offer, always read the fine print to compare interest rates and annual fees to determine what is best for your situation. Once any credit cards arrive, be sure to use them responsibly by keeping a reasonable balance and making your payments on time.
