A credit card is a powerful financial tool, but it can also be harmful if not used responsibly. Learn about how to protect your credit and build a positive credit score at the same time.
Know Your Credit Card Terms and Conditions
Most people don’t take the time to read their credit card terms and conditions. But it’s important to understand the fine print before using your card. Here are some key things to look for:
Annual Percentage Rate (APR)
This is the interest rate you’ll be charged on any outstanding balance if you don’t pay it off in full each month. It’s important to know what the current APR is so you can calculate how much interest you’ll be charged if you carry a balance.
Minimum Payment
This is the minimum amount you’re required to pay each month to keep your account in good standing. If you only make the minimum payment, it will take longer to pay off your balance and you’ll end up paying more in interest.
Balance Transfer Fee
If you transfer a balance from another credit card, most cards will charge a fee of 3-5%. This is something to consider if you’re trying to pay off debt quickly.
Cash Advance Fee
Taking cash out of an ATM with your credit card will usually incur a fee of 3-5%. Cash advances also have a higher APR than regular purchases, so it’s best to avoid them if possible.
Late Payment Fee
If you don’t make your minimum payment by the due date, most cards will charge a late fee of $25 or more. You can avoid this by setting up automatic payments from your bank account.
Now that you know some of the key terms and conditions to look for, take some time to read through your credit card agreement. If you have any questions, contact your credit card issuer for more information.
Make Payments on Time
One of the most important things you can do to use your credit card responsibly is to make your payments on time. This means setting up a budget and sticking to it so that you can make all your payments on time, every time. If you find that you’re struggling to make your payments on time, there are a few things you can do to help yourself out.
First, try setting up automatic payments for your credit card bill so that you never have to worry about forgetting a payment. You can also set up reminders for yourself so that you always know when a payment is due. Finally, if you’re struggling to keep up with your payments, consider speaking to a financial advisor who can help you get back on track.
Keep Your Balance Low
When using a credit card, it’s important to keep your balance low. This means that you should only charge what you can afford to pay off each month. If you keep a high balance, you’ll be paying interest on that balance and it will take longer to pay off your debt.
Use Your Card for Everyday Purchases
If you’re trying to improve your credit score, one of the best things you can do is use your credit card for everyday purchases. By doing this, you’re demonstrating to creditors that you’re a responsible borrower who can make regular payments on time.
Of course, it’s important to only charge what you can afford to pay back in full each month. Otherwise, you’ll end up paying interest on your balance. This will offset any benefits you might have been hoping to gain from using your card regularly.
Keep your spending in check and pay off your balance each month. With this, using your credit card for everyday purchases is a great way to help improve your credit score over time.
Track Your Credit Card Activity Regularly
It’s important to track your credit card activity regularly for a few reasons. First, you’ll want to make sure that all the charges on your statement are ones that you authorized.
Secondly, monitoring your activity will help you spot any suspicious or fraudulent charges quickly. This way, you can report them to your credit card issuer and avoid having to pay for them.
Finally, keeping an eye on your credit card activity can help you keep track of your spending. This is a way for you to ensure that you’re staying within your budget.
There are a few different ways that you can track your credit card activity. One option is to check your online account portal regularly.
Most issuers will send you an email or text message alert whenever there is a new charge on your account. This is another way to stay on top of things. You can also set up alerts within your budgeting app or software if you’re using one.
If you notice any unauthorized charges on your account, be sure to report them to your issuer right away. They should be able to help you resolve the situation and refund the charges if necessary.
