Over the years many people have started to take advantage of Credit cards. When these cards were first released people treated them with much respect, only making a few minor charges to the card per month and being very strict with their payments. However, in modern times, credit cards have become so common and easy to get that people now take them for granted. This, of course, results in the debt problem many Americans have to face.
There are many ways to keep from abusing this small, irrelevant, seeming piece of plastic. It all takes place when you set rules for yourself to follow so you don’t over spend. We all know that common sinking feeling when we receive our credit card statement in the mail and realize our balance is WAY higher than anticipated. With this in mind there are several tips to keep your credit in check.
10 Tips to Keep From Getting Into Credit Debt
Paying More than the Required Minimum
If you’re spending money on your card every month, yet only paying the minimum amount you are sure to find yourself on a downward spiral of debt. For example, if you owed 10K dollars to the credit card company, yet only pay the minimum of 30-40 dollars, it will take up to 18 years in order to pay it all off.
Paying Off your Cards
This is probably obvious to most of you but you may not know the safest way to go about this while maintaining a budget. If you own multiple cards that have debt, choose the one with the smallest balance. By concentrating on one item of debt at a time one might be surprised at how rapidly they are able to get themselves out of the hole.
Being Smart when it comes to charging
Don’t run up your card to hit the maximum limit, ever. If used in the proper manner you will be able to have a good effect on your credit score. However, if you use your card up to the maximum, you will give yourself a negative score.
Not Using Cash Advances
If you pay attention to detail you will notice that the interest rate is substantially higher than that of a credit card. Don’t use them unless you absolutely have to in some sort of emergency.
Paying On Time
In order to maintain your credit score, you should always make sure to make a payment on time. A single late payment may cause your credit score to drop by as much as fifty points, causing you to move from good credit, to bad credit, in no time flat. Once you have dropped out of the good credit zone you will notice your interest rates might start to rise, costing you more money every month.
Smart Credit Card Users will often go online and compare interest rates between cards. Upon finding a better deal most will call their current credit card holder and ask them to match the interest rates. If your credit card company does not wish to comply simply switch your balance from your current company to that with the lower interest rates, saving you money every month.
Watch your Account
Credit card fraud is no joke and is only getting worse throughout time. A Smart Credit Card User will make sure to keep an eye on their account balance. Look at your transaction history and insure that you are the one who actually made the purchases.
Check Website Security
Make sure not to send out your credit card information to websites if you are not sure they follow proper security measures for card transactions. There are many people out there known as “phishers” that are just waiting to get their hands on your credit information.
Don’t Close your Account
Most people may not know that when you close a credit card account you could actually hurt your credit. This is because of the factor called the “length of credit history”.
Get Reports Regularly
The FTC (Federal Trade Commission) made a report last year stating that twenty out of one hundred Americans have credit report errors and that five percent of them are serious enough to damage their credit scores.
Things to Watch For in Your Credit
When reviewing reports look for negative items such as defaults, late payments and accounts that have gone to collections, as these are all cases that will hurt your credit score. A Smart Credit Card User will then file a dispute with their bureau.
If you wish to become a Smart Credit Card User, make sure to use your card wisely with your purchases. Don’t make large purchases that will result in a large balance when the month ends and pay on time.