Five Tips for Healthy Credit Card Use

Healthy Credit Card Use Today we’re going to focus on a specific area of your credit fitness – credit cards. Because there are many types of cards that can be used in countless ways, it’s crucial to develop a foundation of healthy habits to make sure things don’t get out of hand. Here are five key principles that can help protect your financial health, no matter how much you use a credit card. 1. Don’t borrow more than you can repay. Credit isn’t a ticket to limitless funds. For every purchase you make with a card, remember that it will need to be repaid, often with interest. 2. When applying for a card, be sure to read all the terms of the agreement carefully and completely. Pay attention to key elements such as APR, fees, and repayment terms. If anything is unclear, ask questions. 3. Never miss a payment. Whenever possible, pay more than the minimum amount due to stay on top of your total debt. And if you can’t make a payment on time for whatever reason, be sure to notify the creditor in advance of the payment due date. 4. Read your monthly statements carefully. Review all charges to your account and make sure your payments are being properly applied. Also, double-check all relevant interest rates and watch for any changes to the terms of your card agreement. 5. Beware of any potential fraud. When charging purchases online, make sure you’re using a secure site. Be wary of any suspicious requests for your credit card number, PIN or other personal information. And if your card is lost or stolen, report it to the creditor as soon as possible. Like most forms of credit, a credit card should be a tool to help you manage your spending, not an invitation to simply do more spending. For many people, the ease of making spontaneous purchases or settling unexpected expenses with a credit card can be a dangerous convenience. Luckily, there are some ways you can help prevent your credit card balances from growing beyond your control. Set up an automatic monthly payment to your credit card account, well ahead of the due date, if possible, to guard against late or missed payments. Whenever possible, pay off your entire balance every month. With all purchases, especially big ones, be aware that the money will ultimately need to come out of your pocket. The longer it takes you to pay it back, the more you’ll end up paying in the form of interest and finance charges. If a card comes with purchase-based bonuses, such as frequent flyer miles, don’t buy more stuff than you normally would just to rack up points. While they can be a nice bonus, such perks are not a valid reason to take on a greater debt. See, you’re already looking like a credit master. Stick to these simple rules for credit fitness and you’re sure to stay in fabulous shape.

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