Owning a credit card can be an important aspect of your
financial worthiness. It can put you on the map to building
your credit history and open doors to obtaining credit
opportunities. However, it takes a responsible consumer to
use a credit card conscientiously. During the holiday season
credit card offers may pop up in your mail box on a daily
basis. Don’t be tempted by the offers without first following the
dos and don’ts of owning or using a credit card. If you are
looking to clean up your
credit report and finances in 2014, follow these easy steps to
owning a credit card.
Rule Number 1: Do not have too many credit
Having too many credit cards can wreak havoc on your
credit score. Too many credit cards create temptation for
some consumers. Some consumers don’t know how to stop
charging and more than a few credit cards allows you to continue
charging on different cards when you have reached your credit
Rule Number 2: Understand the offer and
Often times, consumers are tempted by balance transfers and feel
relieved to transfer their existing balance to a non-interest
bearing account. Understand that credit card companies are in
the business of making money and an offer that sounds too good to
be true usually is just that. Make sure to read the fine
print before transferring your balance. Credit card companies
offer low or no interest as an incentive, but this offer can expire
after a short period of time and then the interest will sky rocket
to more than you were initially paying.
Rule Number 3: Choose a card that best suits your
Don’t be tempted to choose a card for the wrong reasons, such as
rebates or reward programs….perhaps you need to travel and a card
sounds appealing because it offers you free miles. Choosing a
card for the wrong reasons can cause you financial distress.
Make sure everything the card has to offer is right for you, not
just the perks. Make sure the card offers the best rates and
terms available to you.
Rule Number 4: Make more than your minimum
Failing to only make your minimum payment every month will get you
into hot water. Paying the minimum amount will amass
additional fees and interest payments that will allow your credit
card bill to skyrocket beyond what you can afford to pay.
Minimum payments often allow your credit card bill to end up at
your limit and will destroy your
Rule Number 5: Do not make late payments on your
Making late payments on your credit card bill is almost as bad as
not making a payment at all. Failing to make a payment will
mean additional late payment penalties and a mark on your credit
report. Credit card companies often punish failure to pay by
charging late-payment penalties that can cost more than your
minimum monthly payment. To make it easier to pay on time,
set up a reminder on your computer or phone to pay you bill or try
setting up computer payments so all you have to do is transfer the
money on line to avoid the hassle of mailing a check.
Rule Number 6: Do not exceed your credit
Exceeding your credit limit will destroy your credit score.
If you are getting close to your limit and feel you cannot pay off
your balance in full every month, try spending cash on necessities
or contact your credit card company to try to increase your credit
limit, not to allow you spend more, but to protect your
If you are having trouble with your finances and wish to speak
with a licensed attorney for a free
case review, contact SmithMarco P.C.