How to Use Credit Card Properly?
Credit cards can be real menace if you do not know how to use it. Thearticle will tell you how to use credit cards wisely to avoid being avictim of bad credit cases. 1. All credit cards have a magnetic strip, where the customer isrequired to sign. It is mandatory to sign on this label, as this wouldbe compared at the merchant outlet whenever the customer makes any transaction.
2. Would you buy it if you had to pay cash? - Using a credit card is convenient--sometimes too convenient. Before you make any unplanned purchase, ask yourself whether you would still buy the item if you hadto pull cash out of your wallet instead of plastic. Often, the thrillof "buy now, pay later" makes us more likely to buy things we don't really need.
3. When you do use your credit cards to make purchases, you have anexcellent opportunity to improve your credit history. By making yourpayments on time, you demonstrate your credit worthiness. Some expertsdo recommend the making of a few credit purchases that will be paid forover time for exactly that reason, saying that if you don’t use thecredit you have, you leave no paper trail of good behavior. This pointof view does have merit, but the concept of necessity, practicality and durability should still apply to such purchases.
4. Avoid exceeding your credit limit. Don't allow your credit cardbalance to grow out of control. If you must use your card for a bigticket item, make sure you will have the resources to pay off this purchase within a few months. By keeping your balance in check, you will save on interest and finance charges and reduce the risk of getting into financial trouble.
5. Financial discipline is very much important. Generally speaking, onecan enjoy the interest free credit for 45 days. Repay your amount ofcredit within 45 days and this can improve your credit worthiness.
6. It is always a good practice to change the PIN (personal identification number) frequently. One should enter the PIN in such away that no one can easily remember the keystrokes.
7. Pay the highest interest rate card first - If you carry more thanone credit card, your cards probably have different interest rates. Ifyou're carrying a balance on all your cards, you should generally make the greatest effort to pay off the card with the highest interest rate.If the balance on the higher rate card is large enough, it may evenmake sense to use a card with a lower interest rate to make payments onthe higher interest card. Once the high-interest card is paid off, you should close the account so that it is removed from your credit record.
8. It is good to have an online account for efficient tracking of thecredit account. Keep track of your purchases and avoid paying interest on purchases you could have made just as easily with pocket change. Any unauthorized transactions or errors in the statement should be promptly notified to the bank.
9. You should never provide the credit card number and the PIN to anybody over the telephone.
10. You get the opportunity to gather reward points for every purchase you make with your special cash back credit card. If you can hold upthe reward points for a considerable amount of time and value then you can use it for something which you could not have bought otherwise.
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