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Credit Card Usage TIPS
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Credit Card Usage TIPS

How you use your credit is reported by lenders and reported to national credit bureaus to create your credit history. That's why it's important for you to have good spending and paying habits. By using credit, you are promising to make payments on the debt. The best way to avoid credit problems is to be disciplined when using credit.

  • Make payments on time. Do not procrastinate!
    You should actually make your payment on the day you receive your bill. This saves you finance charges and insures that the payment will be received on time. The due date is the date the company must have your payment in hand, not the postmark date. Better still, make arrangements to pay online. Late payments mean extra fees, higher interest, and a negative mark on your credit report. If something happened and you missed your due date, call your creditor and ask them if there is any recourse. If you have been a good customer they might reverse the late fee. Generally a card company will do this once or twice a year.
  • Contact the card issuer before problem occurs.
    Call your issuer right away if you can't make a payment. Some companies are willing to work out arrangements.
  • Check your mail and sort it everyday.
    Go through our mail everyday and don't let unopened envelopes pile up. All important documents and bills should be placed in a special location. Even better handle your mail as soon as you open it. You are less likely to lose things, forget payments or get overwhelmed.
  • Send your payment as early as possible if you carry a balance.
    If you tend to carry a balance on your credit cards make sure you send in your payment as soon as possible after your receive the bill. Most issuers calculate interest on a daily basis, so the sooner the bank receives payment, the less interest you will pay.
  • Check your credit report periodically.
    It’s important to keep track of your credit and credit report. This way you can correct mistakes before they can do you harm. New legislation has made it mandatory for credit reporting agencies to give you a copy of your credit repot, for free, once a year, but you have to request the report from them.
  • Budgeting
    Monitor your bills and compare them to your budget every month, making spending adjustments when necessary. In general, your total monthly debt should not exceed 36 percent of your monthly income. Using your credit cards wisely will help you keep your debt within manageable limits. Preparing for planned and unexpected expenses is the best way to guarantee that your credit history remains strong over time.
  • Report any changes immediately.
    If you change your name, address, or phone number, notify your card issuer immediately. Incorrectly handled mail forwarding or other delivery problems could result in a late payment.
  • Monitor your monthly billing statement and any interest change.
    It's important to monitor your monthly billing statements carefully. Most card issuers review their pricing periodically and notify you of changes only in flyspeck type on a note that comes with your bill. So double-check the rates and fees you're now paying on your cards.
  • Pay more than the minimum payment.
    If you pay only the minimum amount due, it can take you decades to pay off your balance.
  • Pay the highest-interest-rate cards first.
  • Carry credit cards that charge a lower interest rate or offer a promotion rate.
    Check your current interest rate every time you get your credit card bills and keep track of any rate changes.
  • Beware of "teaser rates"
    Teaser rates are very low introductory rates that increase after a number of months. Make sure you read the fine print. In addition, cash advance fees can be higher to compensate for the low rate.
  • Cancel unnecessary credit accounts.
    Too many credit cards can hurt your credit rating, even if you don't use them. If you apply for a mortgage or personal loan, the unused credit cards can affect your chances because lenders look at your "available credit," whether it's used or not.

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