Credit cards – more than just a necessary evil

Wednesday, August 3rd, 2011

The image associated with a credit card today is quite unlike what it used to be a decade or so back. People today are more afraid of their credit card than considering it to be something that could be a beneficial method to spend their money. In fact, you might perhaps want to know more about this before dismissing it for something else. There are multiple benefits associated with a credit card, but there are also some factors to account for before going out there and sliding at your whim. If you are careful, this is definitely a beneficial method of paying for your purchases.

First, keep in mind that a credit card should not treated like a long term loan. Aim to pay your credit card bills as quickly as possible, preferably within a month or two. The reason why you find it to be so dissuading to use a credit card is the fact that you take your own time to pay the bill, which will keep increasing thanks to the interest charged by the credit card companies. Therefore, these things can work against you, which could ultimately make it harder to pay the money back in its entirety.

Next, you should treat your credit card with the same amount of care that you would do with your cash. Just like how you wouldn`t want to spend your cash purchasing unnecessary things, you would also want to take care to ensure that you are not going to slide your card when not necessary, which could result in big bills and a lot of avoidable expenses. Therefore, think twice before you would use your card to make a purchase as it is quite possible that you would be able to avoid these expenses.

Some people might also be interested to learn about choosing the right credit card when deciding on one. There are some unique features that could ultimately cause you to pick a particular card over some other option that might be out there. For example, you would perhaps want to go with a credit card that comes with 0 interest on balance transfers if you intend to use the credit card for a lot of balance transfers. These cards typically are harder to obtain and normally require a pretty good credit score. Therefore, unless you are able to get the right credit rating, it is unlikely that you would want to go in for these cards and might want to check other options.

For those that don`t fancy a low rate balance transfer, it should be possible to perhaps ensure that you are able to get a credit card with some other lucrative offer. People go in for cards that come with very good cash back schemes. This is a very good alternative to consider instead of low balance transfer rates. In this manner, you will be able to easily get money for each time you swipe the card, which can in turn be cashed in for a check. There are other ways to earn from your transaction as well.

Beyond that, you should learn to use your credit card in a manner that will encourage lenders to provide you with larger limits. For example, using your credit card to the maximum limit every billing cycle and only paying back a minor part of it does not add up to good credit card management. Learn to impose restrictions and stick to them in order to avoid debt and ensure that you are not going to be spending more money unnecessarily. This is a very important thing that you would probably want to account for, as it forms the foundation of good credit history.

Also, keep only a small number of active credit cards with you. At any time, you shouldn`t have more than three credit cards, which is definitely a sufficient number of cards to deal with. In fact, try and hold onto one credit card for a significant period of time, as this can also build a good credit line. However, if you absolutely want another card and already have three or four credit cards, it might be a good idea to close some of the other credit cards on hand. This will help you easily manage cards and also avoid going into debt unnecessary.

Sometimes it might also be necessary to read the terms and conditions carefully before you do sign on the dotted line. In this manner, you will not be left with some ugly surprise later on, when you get your monthly statement. People tend to neglect this, which is why the end up with an unnecessary big credit card bill. If you have any doubts or queries, have them clarified before you sign up for the credit card. This is necessary in order to be absolutely sure that you are not going to be stuck with charges and fees that you had absolutely no idea about.

When using the credit card, it is possible that you might end up stumbling across some charges that you don`t recognize. If this is the case, you will probably want to consult with the credit card company and have it taken care of. The good news is that most credit card companies today provide free fraud protection for their customers. Therefore, you should avail these offers to ensure that you don`t end up paying unnecessarily or become a victim of false charges. The protection might also extend in the case of theft, which can be very handy.

Credit cards are also great in case you want to build your credit line. Therefore, people with poor credit lines would want to look into this and verify that they are able to get a better credit card that can handle their needs which can potentially help in ensuring that they are not unnecessarily denied auto or home loans because of a poor credit score. Thus, in this manner, you too should be able to save big and stand to gain tremendously from all that the credit card has to offer.

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