By Corey Weiner
Financial Correspondent - Every other Sunday
Resource : Askmen
Credit is a commodity that is just as vital as the air we breathe these days. Even the U.S. government spends beyond its means and relies on credit at times. Here are a few ways to ensure that you use your credit cards wisely, and to benefit from them as well.
Financial Correspondent - Every other Sunday
Resource : Askmen
Credit is a commodity that is just as vital as the air we breathe these days. Even the U.S. government spends beyond its means and relies on credit at times. Here are a few ways to ensure that you use your credit cards wisely, and to benefit from them as well.
Do your homework
A little research will save you time, money and aggravation in the long run. Take a few minutes to weigh the good and the bad of a credit card before you even apply. In the credit game, all cards are not created equal. For example, some will offer very competitive introductory interest rates, while others charge an annual membership fee but offer frequent flyer miles or merchant discount coupons on certain purchases. Your credit card should suit your financial needs, so don’t just fill out any credit application that arrives in the mail. Assess your credit card use by considering what kind of balance you typically carry from month to month, then go with a financial institution you feel comfortable owing money to. Customer service can be a huge factor if you have to dispute a purchase or you miss a payment by a few days. Opt for a bank that offers a favorable grace period and is eager to help you versus an institution that treats you as though it is doing you a favor by issuing you a credit card.
Stick to one card
OK, two if you must. If you find yourself owing various amounts among several cards, consolidating those menacing balances into one at a competitive interest rate could be a very smart move. First, you’ll save by paying only one low rate; most companies offer an attractive annual percentage rate (APR) on balance transfers. The second advantage is psychological; it can be very draining on an individual to cut a host of checks to his creditors each month. Instead, you’ll have peace of mind making only one lump payment to a single company; you’ll spare yourself the headache of juggling statements and balance due dates each billing cycle.
Maximize your card’s benefits
The banking industry is always adapting as key players fiercely compete for market share. Use this to your advantage and seek the most out of your credit card. For instance, this could mean discounts on purchases from affiliated merchants, free points toward airline tickets or an assortment of alternative incentives for account holders in good standing.
One of the most valuable features of a good credit card account, however, is consumer protection under certain circumstances. Whenever possible, use your credit card for substantial purchases like moving services, major auto repairs or hotel reservations. If an arrangement goes south or someone doesn’t live up to their part of an agreement, it pays to have a paper trail. Major credit card issuers can often help you file a dispute, conduct an investigation and recover your money if they discover any foul play.
Do better than the minimum
Generally, the term “minimum” has negative connotations, such as in “minimum wage,” “minimum skills” and “minimum protection.” If you want to maintain good credit, discipline yourself to ignore “minimum” payment amounts. As a prudent consumer, you should be using credit cards to your advantage, not the bank’s. You pay for something with a credit card today, and when the statement arrives a few weeks later, you should pay back the same amount plus a small finance charge for “briefly borrowing the bank’s money.”
The reality is, however, that plenty of consumers don’t have the money to pay the outstanding balance when the statement inevitably arrives. Instead, they make the minimum payment and carry the balance; unfortunately, paying the minimum amount often barely covers interest, let alone any of the balance. Now multiply this by six or 12 months’ worth of purchases and you will see how quickly you can find yourself in debt.
Paying more than the minimum will minimize your finance charges and leave you in good standing with the bank. If you keep this up, you will soon receive a credit limit increase notice in the mail. So the next time an emergency pops up, such as having to replace a washer/dryer or the tires on your car, the necessary credit will be at your fingertips.
Maximize your card’s benefits
The banking industry is always adapting as key players fiercely compete for market share. Use this to your advantage and seek the most out of your credit card. For instance, this could mean discounts on purchases from affiliated merchants, free points toward airline tickets or an assortment of alternative incentives for account holders in good standing.
One of the most valuable features of a good credit card account, however, is consumer protection under certain circumstances. Whenever possible, use your credit card for substantial purchases like moving services, major auto repairs or hotel reservations. If an arrangement goes south or someone doesn’t live up to their part of an agreement, it pays to have a paper trail. Major credit card issuers can often help you file a dispute, conduct an investigation and recover your money if they discover any foul play.
Do better than the minimum
Generally, the term “minimum” has negative connotations, such as in “minimum wage,” “minimum skills” and “minimum protection.” If you want to maintain good credit, discipline yourself to ignore “minimum” payment amounts. As a prudent consumer, you should be using credit cards to your advantage, not the bank’s. You pay for something with a credit card today, and when the statement arrives a few weeks later, you should pay back the same amount plus a small finance charge for “briefly borrowing the bank’s money.”
The reality is, however, that plenty of consumers don’t have the money to pay the outstanding balance when the statement inevitably arrives. Instead, they make the minimum payment and carry the balance; unfortunately, paying the minimum amount often barely covers interest, let alone any of the balance. Now multiply this by six or 12 months’ worth of purchases and you will see how quickly you can find yourself in debt.
Paying more than the minimum will minimize your finance charges and leave you in good standing with the bank. If you keep this up, you will soon receive a credit limit increase notice in the mail. So the next time an emergency pops up, such as having to replace a washer/dryer or the tires on your car, the necessary credit will be at your fingertips.
become a credit pro ....
Remember: Everyone uses credit, even the biggest, most successful investors and corporations in the world. Know the responsibilities that come with the territory, maintain your own records, pay attention to money-saving opportunities, and use the bank’s resources to your advantage.
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