4 Tips Credit Card Owners Swear by
Who doesn’t like the idea of unlimited cash in their wallets? Credit cards give you a thrill of financial security, especially if you’re a first time user. While having a little pool of money to dip in every time you run out of cash is convenient, more than often, credit card owners end up mismanaging credit. To manage a credit account better, you will need a thorough understanding of it’s functioning
Tip: Get yourself on a budget
Overspending is inevitable when you feel like you have a reserve if cash to spend on impulse. The first thing a credit card beginner should do is plan a budget that keeps you from doing away with too much cash. When you register for a credit card, ensure the company has your phone number to send you updates regarding the account balance, this will serve as an effective reminder. Also, managing your personal budget will to contribute towards maintaining a good credit score.
Tip: Keep your credit limit reasonably low
Credit card companies set a credit limit for consumers keeping their repayment capacity in mind. Companies encourage card holders to raise credit limits with their income levels. With an increasing income it may be tempting to go ahead and get a higher credit limit. However, it’s best to stick to the initial lower limit for at least a year after purchasing the credit card. In order to fully grasp the implications of relying heavily on credit cards, you will need a year of usage.
Tip: Make full use of sign-up bonus
Credit card bonuses are beneficial add-ons for credit card owners. To double up your signing bonus, look for a deal that offers you more on your card. Ask your friends or a relative to sign-up for the same kind of card when there are offers for references. More than often, bonuses make for very attractive deals.
Tip: Opt for full payments
With monthly expenditure like bills, supplies and the additional burden of personal debt, mortgage debt or a debt repayment plan the minimum amount payable on credit card bills may seem like a good option. However, your credit card provider will charge you 1.5 to 3 per cent on the balance amount per month. The interest rates will take away a lot more from your personal budget. This is precisely why full payments are a better option. Lapsed payments also lower your credit card ratings.
Credit cards can be a very convenient tool when used right. Beginners should practice caution in the first few months of use. These tips will help you make full use of your new credit account.