5 Easy Steps To Improve Your Credit Card Management
By following these simple steps you will not only begin to manage your credit cards more responsibly but you will also lower the chances of incurring fees and charges. You will also strengthen your credit file, which can help you get much lower interest rates!
1. Be Selective
Chances are, if you have a good credit rating you will find that you receive a high number of 'special' offers from card providers, trying to grab you as a customer. Sometimes these offers can be quite good, so used sensibly they can help you save money or clear your balance quicker.
However, you need to remember that you should not automatically say yes to the offer! It might be tempting, but remember that the more credit cards you have, the more debt you are likely to build.
2. Limit Yourself
Ideally most of us should limit the number of cards we hold to 2 - or even just one if possible! The majority of card holders choose to have one for more regular use, perhaps even daily spend, and another for emergencies. This limits the potential debt you could run up, and also helps to avoid over stretching your financial means.
3. Use Your Card Sensibly
It's time to be honest with yourself. Are you spending more money than you earn on a monthly basis? Do you find that you make credit card purchases when the cash isn't available?
While there's nothing wrong with using your credit card for convenience, you must be certain that you have money available to pay off the balance within a reasonable period of time. This is how 90% of those struggling with debt end up in that situation.
4. Pay More Than The Minimum
The credit card minimum payment is designed to keep you in debt to the provider and will never actually help you clear a balance!
Why? Because the minimum payment is primarily made up of interest accrued, so you end up simply paying off the interest and clearing very little of the actual balance.
Always try to pay off more than the minimum payment you are asked for, even if it only a few dollars more. This will help keep your interest charges lower and also clear your actual balance quicker too!
5. Check Your Credit Report
It is a great idea to check your credit report at least once per year, preferably twice. This is due to the increasingly common risk of identity theft.
If someone is using your identity to open credit accounts, your report will reflect these changes and alert you to identity theft.
In addition, it is not uncommon to find incorrect or inaccurate entries on your file also, which could end up increasing your risk factor and causing you to be declined for credit.
These entries can be removed, but you need to know about them first! Make sure to read our guide on debt management as well.