With great power comes great responsibility. Credit cards are the same way. They can help establish you, but they can also damage your credit score and put you in some serious debt if you are not careful. These helpful tips below will help you make sound financial advice.
1. Comparison shopping
Signing up for a credit card is a big deal. This is not something to be taken lightly, and the card that is right for one person usually isn’t right for someone else. Travel points, APR, introductory offers, how interest is calculated, and balance transfer are all important points to consider. ****If you’re confused, or want to learn more *** click here for our guide on how to select a credit card, as well as our top recommended cards.**** Shop around for the best deal. Stick with reputable companies. Often if it is too good to be true, and they’re an unknown company, it might be!
2. Keep a zero dollar balance
Pay your balance off each month whenever possible. This is the best way to save you money (which you can spend on other things). There is a tax on your time, and convenience has a high price. It’s best to only spend what you have, and whenever possible pay your credit card off at the end of each month. ***click here to learn how different types of APR is calculated ****
3.Keep your minimum balance low
This will help control your spending habits. Keeping your credit maximum low gives you a ceiling to prevent overspending, and going into debt! Be careful, as credit card companies want you to overspend!
4. Keep only the cards you use
By limiting the number of credit cards you have, you also limit the amount of debt you can accrue. It’s far better to have one card with reward points that you take advantage of, then ten cards with reward points you rarely use. ***click here for top reward credit card points**** Furthermore, having too many cards can actually hurt your credit score. ****click here to learn what lowers and raises your credit score****
5. Avoid late payments!
Even if you have to carry a balance, avoid making a late payment. Even a single late payment can lower your credit score significantly, and justify raising your monthly- interest rate going forwards. This can cost you thousands of extra dollars. So make your payments on time!
6. Take extra time with large purchases
Do you really need it? If you’re thinking about a big-ticket purchase on your credit card ask yourself (1) do I really need it? (2) can I pay this off at the end of the time. If you cannot pay it off, consider making a budget instead of caving to the instant gratification. If you’re in a pinch, or it is just an offer too good to turn down (and is time sensitive) consider signing up for a 0% interest credit card introductory offer. ****click here / 0% credit cards****
7. Balance what you want versus what you need
If you’re an impulse spender, learn the triggers and then try to avoid them. We suggest to impulse spenders to not carry their credit cards around. Carry a single card, with a lower balance around, for emergencies, but give yourself that extra time to think it over first. Your bank account and credit score will thank you!
8. Watch for fraud
Review your monthly statements ***click here for guide how to spot fraud**** Save your receipts and compare them to your statement. It’s a bit of extra work, but you would be surprised how often retail can make errors.
9. Avoid cash advances
The cash is tempting, but the interest snowballs. Avoid them at all costs.