Using a credit card doesn’t have to
be difficult, but there are a few guidelines to follow in order to successfully
manage your financial accounts, then you’ll be ready to go !!!
Be prompt
First
of all, pay your balance on time. This
is probably the most important factor in determining whether your credit score
improves or not. If you don’t pay your
bill on time, your APR may be raised, and there will likely be a fee. A great way to remember to pay your bills on
time is to set up a reminder on your calendar. Google Calendar is a great option that alerts you via phone or email
when something is due.
Watch
the watchers
Quality
> quantity
Rather
than take out a lot of credit cards, ask for credit increases on the ones you
have. The older and more established
your credit cards are, the more your credit score stands to improve. Being in possession of a card for ten years,
as opposed to one week, makes you appear to be more secure — which, in turn will
improve your credit.
Exceed the minimum balance due
Pay
your balance in full — or as much as you can afford — each month. This will signal to your credit card
companies — and credit report agencies — that you view each credit card account as
a personal loan that needs to be paid back, as opposed to permission to go on a
shopping spree.
Exercise restraint
Don’t
go above your credit limit. If you do,
you’ll be charged a fee and it will negatively affect your credit report. Depending on the card, your credit limit may
or may not increase. It’s always best to give the credit card company a call to
see what they say as they may be willing to increase your limit if you’ve had
an account with them for a while, but it depends on the bank’s policy. It may
not always be the best idea to raise your credit limit: the higher your card
limit, the more you’ll eventually have to pay back.
Transfer your balances
Consider
transferring your balance to a different card after the free 0 % APR year, if
applicable. Always apply for cards with
the lowest available APR — and if you have any cards with a high balance or APR,
transfer some of that balance to a card with a lower APR. Keeping your balances below 50% will improve
your credit score. There are numerous online tools for finding and applying for a credit card that's great fit for you.
Start small
If
you’ve never had a card before, or you’re looking to improve your credit score,
consider cards with a relatively high approval rate, such as department
store cards or credit cards through your bank or credit
union, to get started. This way, you can establish your credit—assuming you are
able to pay your monthly balance on time. Then you will eventually qualify for ‘silver’ and ‘gold’ cards with
lower interest rates.
Monitor yourself
Finally,
create a budget to follow. There are
more than a few budgeting
apps out there. Making — and sticking to — a budget will make it easier to follow the
aforementioned advice.
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