Using Credit Cards Responsibly
by Credit
Cards PI.com - Copyright © 2007
Getting approved for a credit
card is much easier than ever before-- and once you've
been approved, the credit card companies are more
than eager to increase your limit. With so much available
credit, how do handle it responsibly and you keep
your finances in good standing?
Many first time credit users
see the low monthly minimum payment and assume they
can shop indiscriminately because they can afford
the minimum monthly payment. This is a very dangerous
road to travel. Once you start to slide, the harder
it is to stop or even slow down. Eventually, can start
to accelerate even faster and faster into debt.
The first thing to understand
is that the credit companies are in the business of
making money. To do this, they need to collect interest
and services fees. If you pay your balance off each
month, the credit card company doesn't make a dime.
This is the situation you want to be in-- using their
money interest free.
However, most of us have times
when we have to carry a balance. When that's the case,
here are some tips to use credit to your advantage:
- Pay off as much as possible
and as soon as possible. Never pay just the minimum
payment!
- Always make your payments
5-7 business days before the due date to insure
that you don't get charged late payment fees.
- Put your purchasing on hold
when you're carrying a balance. Don't slide into
more debt by continuing to add to the balance.
- Inspect your monthly statement
thoroughly to be sure there are no unauthorized
charges or other inaccuracies.
- Avoid spending near your
credit limit. You take the chance of going over
and being charged overdraft fees. Your next payment
will include these fees along with your normal minimum
payment and may stretch your budget beyond its limit.
- Transfer your higher interest
balance to 0%
intro credit card. Prepare to pay it off before
the introductory period ends.
One way to manage your spending
is by taking advantage of online banking. You can
see your account activity on a daily basis and even
arrange to make electronic payments over the Internet.
Some people find it helpful to use a computer program
to keep track of their spending. There are a wide
assortment to choose from including Quicken® and Microsoft
Money®.
If you do get into financial
difficulties and forget to make a payment, immediately
contact the creditor and let them know your payment
will be sent immediately. If you act fast enough,
they may not report the infraction to the credit agencies.
And last but not least, read
the entire credit agreement and especially the boring
fine print. This is where you'll find a list of the
fees for overdraft and late fees.
© Credit Cards PI.com. Visit
us for Low
APR Credit Card Deals
|