How to Achieve Better Finances with Credit Cards

Published on 25 September 2015 by Raffick Marday

How to Achieve Better Finances with Credit Cards

Credit card usage is an almost universal fact of modern life. There can be no denying that these cards represent a degree of flexibility and convenience that is hard to beat. However, the key to smart credit card utilisation is knowledge. By reading the ideas in this piece, it is possible to acquire the breadth of understanding necessary to make wise financial decisions.

Do not close credit card accounts until you know the full effect it could have on your credit score. Even if you do not plan to ever use the account again, many times, closing an account leaves a negative mark on your credit record, and should be avoided. Also, maintain cards that have most of your credit history.

When choosing the right credit card for your needs, you need to make sure that you pay attention to the interest rates offered. Pay close attention to how long that rate is good for if you see an introductory rate. Interest rates are one of the most important things when getting a new credit card.

Always read everything, even the small print. Before accepting any credit card offer ensure you know all the details. Details like the rate of interest you will have to pay often go unnoticed, missing details may mean you end up paying a very high fee. Additionally, you may wish to know about their penalties and any applicable grace periods.

Many times, the reasoning behind the minimum payments that credit card companies set is due to the fact that they want you to pay more over time than you would if you paid more toward your debt. Pay much more than what the minimum payment indicates. This will help you avoid pricey interest fees in the long term.

If you see any suspicious charges to your credit card, call the company right away. You will help the card issuer to catch the person responsible, by doing this. This will also limit the risk of you being held accountable for their charges. Credit card companies have an interest in making it easy to report fraud. Usually, it is as quick as a phone call or short email.

Take the time to play around with numbers. Before you go out and put a pair of expensive shoes on your credit card, sit with a calculator and figure out the interest costs. It may make you think again about the wisdom of buying those shoes that you think you need.

Take advantage of the freebies offered by your credit card company. Many companies have some sort of cash back or points system that is attached to the card you own. When you use these things, you can receive cash or merchandise, just for using your card. If your card does not offer an incentive like this, call your credit card company and ask if it can be added.

Few people are totally unfamiliar with these cards, as they are a staple in almost everyone's financial lives. The lynchpin of smart, strategic utilization of credit cards, however, is a complete understanding of the ways in which they work. Keep the concepts in this article close at hand, and you will have the tools necessary to craft a responsible, prosperous financial plan using your credit cards.


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