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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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