What kinds of feelings come to mind when you hear the words “credit cards?” If you are like many other Americans, you probably feel anxious and nervous when you hear these two words put together. This fear and anxiety will pass, however, as soon as you arm yourself with proper information.
Do not cut up all your cards thinking that will end your debt woes. Sometimes doing this can really backfire and make matters worse, because it lowers your available credit and increases your utilization percentage (which is ideally recommended to remain below 30% of your overall available credit line).
So instead of getting mad and destroying your credit cards, it is better to just get in the habit of paying off your full balance (or at least significantly more than the minimum) every month. Having active revolving debt will boost your credit score, and give you lower interest rates, which really helps paying down your debt.
Getting Better Credit Card Rates & Terms
The key to securing the best possible credit rates and terms, is keeping a close eye on your credit report and making changes and corrections where necessary. Consumers with better credit histories have broad access to cards with low or zero interest, cards that boast rewards programs that can be truly worthwhile, and cards that do not come with costly annual membership fees.
Mark your calendar for the day that you are expecting to receive your credit card statement. If your statement does not arrive when it is expected, be sure to contact the company as soon as possible. You must get a statement each month, carefully read through it to be sure nothing is missing ,or additional charges do not appear.
If your credit card is charging you a high rate of interest on your balance, consider transferring it to a lower interest rate card. This can save you a lot while you are working to pay down that balance. The key is to not charge any more on the old card once you have transferred your balance, or you will end up in a worse financial situation.
Know Your Rights
When it comes to credit cards, you should always know your rights. If you fall behind, know what your options are as well. If you have to speak with other departments, such as the collections department, and others, know what your rights are. You do not want to do any business without knowing all of your available options.
This Is Not Free Money
Do not go on a spending spree just because you have a new card with a zero balance available to you. This is not free money, it is money that you will eventually have to pay back and going overboard with your purchases will only end up hurting you in the long run.
Credit cards can be wonderful tools that lead to financial success, but in order for that to happen, they must be used correctly. When used correctly, it will you to avoid credit card pitfalls, and instead allow you to use your card(s) in a smart way, leading to an improved financial situation.