02 January 2015

How to Responsibly Use & Manage a Credit Card Account ?

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

Keep an eye on your credit report in order to avoid errors and to keep track of whether your score is going up or down. All requests for credit reports eventually go through the central bank, Bank Negara Malaysia (BNM), which is why it makes sense to just cut out the middle man and go to their site.  Your credit report is free of charge—you’re merely required to provide necessary documentation, and you can apply remotely or in person.

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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