Credit and charge cards can go a long way towards improving your credit score, provided you keep up the repayments. You must understand all the terms and conditions of your cards so that you can use them in a safe manner. Have a look at these tips to help you find and maintain a good interest rate and keep your credit history in the black:
- If you have a credit card, do not keep applying for more. Each application registers on your credit history and can have an adverse effect on your score. Most mailshot offers have hefty interest rates attached to them so don’t be tempted.
- Never write down your pass-code or pin number – just keep it in your head.
- Don’t get a reward card unless you know what you are doing. They are designed to make you spend money to get more reward points.
- Stick to one card with a low credit limit and gradually build up you history before applying for more credit.
- Keep your repayments up and reduce your debt rather than keep adding to it. Living off your credit cards each month is fine if you pay the balance in full every month. If you can’t, don’t do it.
- Try and pay more than the minimum amount each month.
All of the above tips will result in a good credit score which means you can apply for credit cards with lower interest rates in the future. You must have a proven credit history first. The following are also golden rules to apply in your financial life:
- Make sure you have the phone number of your credit company or bank in case your cards are stolen. If you leave it too long you may be liable for purchases made without your consent.
- Only carry one, or two at the most, credit cards with you at any one time. This will eliminate the chances of you making purchases you don’t really need, must because you can.
- If you are buying online, make sure the seller is trustworthy and their identity can be verified.
- If you are buying large electronic items, purchase them using your card. Many companies offer free protection for buyers who use their specific credit card to make large purchases. Pay it off as quickly as possible though.
- Make sure you know exactly when your credit card payment is due as this will eliminate any chances of overdue payment penalties and extra interest being added.
- Use your debit or credit cards occasionally. This will keep your account open as some companies shut down accounts that are not used. Make sure to pay off any credit card purchases in full.
While credit cards can be seen as devils in disguise, they can also be a good thing. Provided you use them properly and don’t run up huge debts, credit cards can help you to improve your credit score and eventually help you to apply for better credit deals, with lower interest rates.