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Credit Card Management Tips
Many people enjoy using credit cards in their daily lives for a variety of reasons. Some feel that carrying a credit card is safer than carrying cash. Others enjoy the perks credit card companies give to their customers for using their services. Regardless of your reasons for using credit cards, it is wise to use them carefully and mindfully.
Let's go over some tips so that you can manage your credit card wisely:
Track Your Borrowing Habits: The danger in using credit cards comes when you are not mindful of how much money you are charging, so your monthly amount due comes as a surprise. Use a budget or keep a spreadsheet of all your monthly charges.
Pay Your Bills on Time: Pay attention to the due dates on each of your statements. Paying a bill just one day late may incur late fees on your account.
Paying Full Balance vs. Minimum Payment: Your goal should always be to pay off your credit card each month. This may not be feasible for some people. In that case, pay at least the minimum payment on time each month and, if you can, pay a little more than the minimum.
Managing Multiple Cards: What happens if you have a balance on several different credit cards? Most financial strategists would recommend you focus first on the credit card that charges the highest interest rates. Put all of your available cash toward that credit card while paying the minimum balance on your other credit card.
Balance Transfers: Some credit cards users may be persuaded to transfer their balance from one card to another company that offers lower interest rates or finance charges. This may be a good strategy. A lower interest rate can help you pay off your debt faster because more of the money you send to the credit card company goes toward your actual debt and not just the interest.
Keep in mind, however, that transferring your balance doesn't always work out in your favor. Sometimes credit card companies may advertise a low interest rate, but not every customer who applies will qualify for it. These customers may end up paying a higher interest rate than the one they previously enjoyed.
Credit cards can be convenient and come with a lot of perks, but consumers should be aware of the problems associated with borrowing money. Remember that your credit score is your lifeline for essential life purchases.
For more information on tips for credit card management, access the full article here.
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