Helping You Wade through the Murky Credit Card Waters

Published on 1 January 1970 by Raffick Marday

Helping You Wade through the Murky Credit Card Waters

Even if there is no cash in your wallet, you can still spend money that you might not have even earned yet. Credit cards have added power to your wallet, but also peril. Using your cards wisely can mean the difference between pulling your hair out because of the monthly bill or flying away to exotic destinations. Read on for sound strategies that will help you to use your cards wisely.

Consumers should shop around for credit cards before settling on one. Many different ones are available, each offering a different interest rate, annual fee, and some, even offering bonus features. An individual can find one that best meets their needs, by shopping around. They can also get the best deal when it comes to using their credit card this way.

If you have multiple cards that have a balance on them, you should avoid getting new cards. Even if you are paying everything back on time, there is no reason for you to take the chance of getting another card and making your financial situation any more strained than it already is.

Do not use one credit card to pay off the amount owed on another until you check and see which one has the lowest rate. While this is never considered the best thing to do financially, you can occasionally do this to make sure you are not risking getting further into debt.

It is common for credit cards to be linked to loyalty or affinity programs. Find a perks or royalty program which suits your spending habits. These programs can provide a source of income, when they are used wisely.

Do not pick a pin number or password that could easily be picked out by someone else. Using something familiar, such as your birth date, middle name or your child's name, is a big mistake since this information is readily available.

Pay off as much of your balance as you can each month. The more you owe the credit card company each month, the more you will pay in interest. You can save yourself a great deal of interest each year if you pay even a small amount in addition to the minimum payment each month.

Always know what your utilization ratio is on your credit cards. This is the amount of debt that is on the card versus your credit limit. For instance, if the limit on your card is 500 and you have a balance of 250, you are using 50% of your limit. It is recommended to keep your utilization ratio of around 30%, in order to keep your credit rating good.

As a general rule, you should avoid applying for any cards that come with any type of free offer. More often than not, anything that you get free with credit card applications will always come with some sort of catch or hidden costs that you are sure to regret later on down the road.

Credit cards let you spend someone else's money, on the condition that you are paying them back starting in a few weeks. The interest rates can ruin your future, or the reward points can brighten your coming months. To fall on the side of that divide that you want, apply what you have learned in this article.

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