To build a good credit card is a great tool, especially for those who are only begin their history of creditworthiness. However, this is only true while you successfully control your finances and card balance. It becomes clear that it is significant to know the nuances of utilizing credit cards and aware how you can benefit from this. We want to share such knowledge, so we wrote a guide with helpful advises on proper utilizing of your credit card.
Find out credit card options
For your own benefit, to use all the advantages of credit card correctly you need to choose the most suitable option for you. Because, for example, if a credit card offers a reward in the form of air miles, but you do not fly anywhere, then this reward does not make sense for you.
To choose a credit card with such rewards that best fit the way of you live it is necessary. If you fly often, air miles as a bonus will suit you perfectly, but if not, then there are quite a few variants for discounts on various groups of goods or just a cash back return for your purchases.
To gain, you need to spend
You make purchases every single month. So why not earn extra benefits? One of the big Advantages of Credit Card is that while you outlay money with a credit card you simultaneously gain it. Usual costs that you are accustomed to pay in cash from your pocket, can turn into bonus points, or return to you at the end of the billing period in the form of a cash back. It is worth taking advantage of this opportunity making planned purchases, or paying bills.
Use free period
Most credit cards offer their customers a free-floating period. Usually such a period can last up to 55 days, when you can use the opportunities provided by a credit card without paying an interest rate. Making purchases with a credit card at the very beginning of the billing period you get almost two months of interest-free loan. You can use this advantage in a variety of situations. For example, when you need to pay expenses, when an insured event occurs until funds are received from the insurance company. In this situation you do not have to spend your own money.
Try to pay off the balance in full
Credit cards assume a minimum monthly payment on your debt, but if you do this, you are more likely to pay only interest and the amount of the debt will be carried over to the next month. Thus, your debt will only increase and your credit score will go down, which of course is not in your interests. Always try to pay off your credit card debt in full. Then you will not pay interest and your credit rating will only grow, increasing your opportunities. Even if you are unable to repay the debt in full try to pay as much as you can.
Pay on time
Timely payment of debt is one of the most important indicators that affect your credit rating and creditors credibility. Being late always entails penalties and a decrease in your credit score.
Keep track of credit rating
It is worth being aware of the status of your credit in order to take the necessary actions in a timely manner. If you do not allow a significant decrease in your credit score, it will only grow and remain excellent.
Give priority to safe cards
In recent years the number of fraudulent operations with credit cards has significantly increased, so it is worth choosing the most secure credit cards, equipped with chips and requesting a PIN code.
Keep up to date with credit card offers
Keep abreast of events, know what different companies offer, so you will never miss interesting and profitable offers.
Do not get a lot of credit cards
Many people having learned about the benefits of credit cards are trying to get them as much as possible. However, this strategy is erroneous, since the probability of spending more than you can afford increases several times. This can lead to financial difficulties and big problems, as well as a significant decreasing in your credit rating. Two credit cards will suffice to keep the situation under control in most cases.
How to make a choice
There are many offers of credit cards from a variety of lenders. Among the hundreds of offers it is very difficult to choose the best option that is suitable for you. But since you know how to use advantages of credit card properly, should be easier.