5 Little-Known Tips for Getting the Most from Your Credit Card
Credit cards are an amazing tool when it comes to financing purchases. They also play a vital role in helping the card holders build their credit and even win some rewards. However, they can harm your financial position if not used carefully.
This explains why in some countries like the United States of America, credit cards are used in making over 74% of all purchases. Unfortunately, most of these card holders are not as good at paying them as they are at using them for payments.
Fortunately, you can follow several tips to ensure that you have used your credit cards the right way and get the most from them. Adopting the following habits is going to help you enjoy all the benefits without any issues;
Pay on Time
Going beyond your credit limit will attract some fees and a higher interest rate. Similarly, if you pay your credit card account before or at the end of the billing cycle, you will be avoiding penalty interest rates and late fees.
In addition, this helps you ensure that your credit record is clean. Most people do not know that having a good credit record helps them achieve a high credit score. A higher credit score, on the other hand, is required for one to get low-interest rates.
To achieve this, mark the date when you are supposed to pay for your credit card. If this date falls on a day when you have not yet received your salary, you can talk with your card issuer to change the billing cycle to a day that works for you.
Don’t Apply for Lots of Credit Cards at Once
Most people assume that the more credit cards they apply for or maybe have, the better their credit rating. Well, you need to avoid applying for a lot of credit cards at the same time. This does more harm than good to your credit score.
When you apply for a credit card, the issuing company does a hard pull of your credit to see if you qualify for credit. Applying for many credit cards means that many hard pulls will be made at the same time.
These pulls stay on your credit history for a long time, up to two years, and are one of the things that affect your credit score the most. You, therefore, should avoid applying for many cards at once.
Avoid Unnecessary Fees
You might think that credit card companies only charge card holders when they spend beyond their limits or when they are late making payments for their cards. However, there are many other charges that you need to avoid.
For instance, there are charges for having your payments returned, transferring balances, and cash advances. Some card issuers even charge fees when you make payments with your phone.
You, therefore, need to keep a record of all your transactions, especially those that attract unnecessary fees. If, for instance, you need a cash advance, you can withdraw enough to avoid taking another advance. This way, you will avoid these kinds of fees.
Stay Below Your Credit Limit
If you keep using your credit card and find yourself going over the credit limit allocated to you, the issuer of the card could increase your interest rate and even charge you some fee. This is a penalty that you need to avoid.
There are many ways of avoiding this. One of the best ways is to keep a record of every purchase you have made with your credit card. You can also check your balance online to see what you have before the next billing cycle.
When doing this, remember that there are merchants such as car rental companies and hotels who put a hold on your card depending on an estimate of the money you might spend, meaning that this might end up reducing your available balance.
Look Out for Account Changes
Sometimes, your credit card issuer might change the terms of your credit account. When this happens, they might call you to explain what is happening. Others will send hard or soft copy notices about the changes.
These changes might involve things such as billing, interest rates, and fees charged, among others. You, therefore, need to make sure that you have carefully read all these notices to understand every single change with your account.
After that, you need to decide whether you should continue using the credit card the same way you have, or maybe you need to make some changes. You might even choose to stop using the credit card altogether.
Following these tips, you will be able to get the most from your credit card.