Simple Solutions When Dealing With Credit Cards

By Author: Noe Randolph
Total Articles: 3
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Let's face the truth; today, people need advice about managing their money and preventing pitfalls due to overspending! Credit cards can either be an excellent tool for building your financial life or a huge liability that can wreak havoc on your finances. Read on to learn some of the best practices to use when dealing with credit cards.

Many people wonder if it is better to have one credit card or many. For most people, it is best to have two or three credit cards open. This will help build your credit score, especially if you are able to pay the cards in full every month. Having more than three open helps lenders look at you in a bad light when they see your credit report.

Make sure you know what your interest rate will be with a given credit card. You simply must understand the interest charges your card will bring before you agree to accept it. If you are unaware of the number, you might pay a great deal more than you anticipated. If the rate is higher, you may find that you can't pay the card off every month.

It is too easy for many people to improperly use their credit cards. It can be ...
... okay to get into debt every once in a while; however, many people just get in way over their heads and can't afford the monthly payments associated with their bills. What you want to do is pay off your balance every month. This will help you establish credit and improve your credit rating.

Don't write your password or pin number down. The safest place for this information is in your memory, where nobody else can access it. Putting the number and password down on paper can be an invitation to fraud and financial disasters.

Set a realistic budget, so that you are able to stick to it. Simply because a card issuer has given you a spending limit, you should not feel obligated to use the entire amount of credit available. Know your monthly income, and only spend what you can pay off in full each month. This will help you to avoid owing interest payments.

Most analysts state that a credit limit should be no greater than 75% of a monthly salary. Taking on a card, whose limit is greater than this amount, may leave you struggling to pay the bill. The interest on that will soon be way over your head.

Avoid prepaid debit cards when considering secured cards. In reality they are debit cards, which means they don't report to any major credit agencies. They do not offer any advantages over a checking account and may charge additional fees. Lay down a deposit, and get a real secured credit card that will report to the bureaus and help improve your credit score.

When you are looking for secured cards to improve your credit standing, avoid prepaid cards. These are typically debit cards and don't report to the credit bureaus. Many prepaid cards charge extra fees and they are really just a checking account. Instead, put a deposit down on a secured credit card. These cards report your on-time payments to credit bureaus, which can help you improve your credit.

It is hoped this article has given you the information you need.