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How To Use Your Credit Cards Wisely

May 16

How To Use Your Credit Cards Wisely

Anyone who has ever had a credit card, knows that they can be a mix of good and bad elements. Though they provide financial flexibility when needed, they can also create difficult financial burdens, if used improperly. Consider the advice in this article before you make another single charge and you will gain a whole new perspective on the potential that these tools offer.

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Review the specific terms of the offer. If you receive an offer touting a pre-approved card, or a salesperson offers you help in getting the card, make sure you know all the details involved. Know the percent of your interest rate, as well as the length of time you will have to pay for it. You must also be sure to learn about grace periods and any fees that may be applied.

 

Shop around for a card. Interest rates and terms can vary widely. There are also various types of cards. There are secured cards, cards that double as telephone calling cards, cards that let you either charge and pay later or they take out that charge from your account, and cards used only for charging catalog merchandise. Carefully look at the offers and know what you need.

 

Be sure you go over the terms that come with your credit card as carefully as possible prior to using it. Legally, using your card for the first time will probably mean that you accept the terms spelled out in that agreement. The fine print on the terms of the agreement is small, but it's well worth the time and effort to read the agreement and understand it completely.

 

Don't start using credit cards to purchase things you aren't able to afford. No matter how nice an item is, you shouldn't use a credit card to finance an item if you cannot afford it. You will wind up paying huge amounts of interest; additionally, the payments each month could be more than you can afford. Leave the store and return the next day if you still want to buy the product. If you still plan to buy it, the store's in-house financing usually offers lower interest rates.

 

Make sure you are consistently using your card. You do not have to use it frequently, but you should at least be using it once a month. While the goal is to keep the balance low, it only helps your credit report if you keep the balance low, while using it consistently at the same time.

 

Remember that you must pay back what you have charged on your credit cards. This is only a loan, and in many cases, it is a high interest loan. Carefully consider your purchases prior to charging them, to be sure that you will have the money to pay them off.

 

Credit cards have the ability to provide great convenience, but also bring with them, a significant degree of risk for undisciplined users. The critical part of wise credit card use is a thorough understanding of how providers of these financial tools, operate. Review the ideas in this piece carefully, and you will be equipped to take the world of personal finance by storm.