Top Credit Card Do’s and Dont’s
|July 10, 2012||Posted by Ashley under Uncategorized|
Everyone knows the basic rules of a credit card, but do you know how to unlock the potential of your cards to boost your credit score and get all those cardholder perks for free? Here are several pieces of advice to consider before you make your next purchase by swipe.
Do make more than the minimum payment. Most credit cards are designed to keep the card holders in debt if they make only the minimum payment each month. In fact, this is a great way to watch your interest balloon to a figure that is even larger than the original balance. To get the most out of the benefits that your card has to offer, become a transactor — that is, a cardholder who pays his or her balance in full each billing period.
Don’t skip a payment if you can’t make it. It can be tempting to just miss a payment thinking that you don’t have the funds to put toward your credit card balance. But this kind of slip-up will only make financial matters worse by possibly incurring a penalty interest rate and damaging your credit. If you don’t have the cash to make even the minimum payment, it’s better to call your card company and let them know. Many times, they will be willing to work out an alternate payment schedule with you to keep you from going farther into debt because of interest charges and penalties.
Do make it easier to make payments by setting up a direct debit. If you can automatically withdraw your credit card payment each month from a bank account, you will find it easier to remain consistent with paying off your balance. You’re less likely to miss the money that is going towards your credit card balance if it is deducted from your check before you even see it, meaning that you can build a good credit habit effortlessly.
Don’t flirt with your credit limit. Just because you may have $2,000 in credit doesn’t mean that you should use it all. If you have to carry a balance on your credit card, it is best to keep it under 30 percent of your total credit limit. When you constantly approach your credit limit and back off, you send a signal to credit rating agencies that you aren’t financially stable, which could affect your credit score.