Credit card?
Thursday, March 11th, 2010 at
10:48 am
asked:
I’m getting a credit card soon and I don’t know anything about them. Please tell me all you know about credit cards, how they work, which has brought you the best of luck, your experiences. I’m really nervous about it.
I’m getting a credit card soon and I don’t know anything about them. Please tell me all you know about credit cards, how they work, which has brought you the best of luck, your experiences. I’m really nervous about it.
Serious anwers please.
Tagged with: Credit Card • Credit Cards • Experiences
Filed under: Credit
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A credit card can be a really good thing to have, or it can be a nightmare. Try to find one that charges no annual fee and that gives you some kind of reward…airline miles, cash back, something. Then…and listen closely…PAY IT OFF IN FULL EVERY MONTH!! You do that, no problem. you start missing payments, then you can quickly get in over your head.
They may occassionally send you the most boring looking documents you have ever seen in the mail. Read them. The credit cards can change the terms of your agreement, and these boring looking notices are the only way they tell you. If you use the card after theyhave sent out the change of terms, you have accepted the new terms.
Good luck.
first of all, do not do crazy with your card. it could cause financil ruin. if you use your card smartly and pay it off every month they can help you get good credit. i try to find one with a rewards program that you can earn points for things you would use anyway or discover gives cash back. just always try to be able to pay it off every month. the interest adds up so fast that you are in over your head before you know it.
All I can say is, use it wisely. Don’t max your credit card and use it only when necessary. Think of it as borrowing money from a relative that you’ll have to pay back with interest. If you’re trying to build up credit, do not use more than 50% of your credit limit. Pay more than your minimum payment when your payment is due and NEVER pay late. Most of the times you have a decently low apr but if you make one late payment, or go over your limit, your interest will skyrock. My first credit card I had 9% interest, I made one late payment and they immediate changed my apr to 28% interest. Be wise when dealing with your credit. Good luck!
Here’s the best way I have found to manage your credit card. Whenever you make a purchase take that amount out of you checking account balance register, that way when the bill comes you just write check of the amount and will never get behind. Easier said than done thats for sure. Get a card that offer some type of reward for using it, cash back or points to trade. I think one of the best is the CITI premier pass, that one that I use. Just remember, try your best never to carry a balance it will eat you up and spit you out. If you have to carry a balance get a card that has a 0% for 12 months intro rate. Also I will impart a trick you can use if you get in trouble. Take advantage of 0% balance transfers. Always try to avoid paying interest. Whew I start to ramble there. Anyway hope this helps.
Oh, don’t be nervous hun, just send it over to me! … lol
Rule no one: NEVER use entire creditline
Two: Use frequently but do not spoil yourself
Three: Think B4 spend! ask yourself that R U sure that U will pay the FULL amount when its due?
FOUR: NEVER NEVER NEVER stay on minimum payments. Always pay balance in FULL.
FIVE: Use only 40% of the limit.
Six: Look for hidden fees. I have about 25 cards all with some benefit and NONE with annual fee.
This will give you peace of mind and will improve your score rapidly.
If used responsibly, it’s a great way to start building a lengthy and solid history. The trick is to not get in over your head. A credit card should be used for emergency purposes, or if you’re able to pay off small purchases. If you’re not able to pay it on time, or at all, then it’s not a good idea. The benefits like being able to rent a car, make hotel reservations, establish credit in general may not compare to the disadvantages of harassing calls of collectors when you don’t pay on time, not to mention hurting your chances of being able to get bigger things like, buying a car, a house, or even a job. Normally when you use a credit card, you have x amount of days before they start charging more money, or interest to what you already charged. That’s called a grace period. After a certain date, you’ll receive an itemized statement in the mail detailing what you charged, how much you owe, and how much additional money (finance charges) were added on. The key to using a credit card is to not to max it out, or charge it to the limit. That’s where they’ll get you. It’s bad enough to borrow money that you can’t pay all at once, but it’s even worse when more money is added on every month for borrowing it in the first place!. Like I mentioned earlier, use the card for emergencies, charge only what you know that you can pay off every month. I’ll even go as far to say that if you have the money to pay for something in cash and you use the card, put that cash that you would’ve used to buy it in a jar, cigar box, it doesn’t matter, put it and use that money to pay the bill when the statement comes in. Another thing. Don’t charge a lot to fast food. It’s a common trap that me myself fall victim to from time to time. That Big Mac or Whopper or whatever your favorite burger is wouldn’t taste so good when you’re paying daily interest on it when you charge it. Keep that in mind. I would probably get one more and that’s it. 1 in 7 Americans carry up to 10 credit cards, and the average American has 4. Me, myself I have 3 which I keep low balances and I pay off on-time, if not early every month.
Another thing is that you can report your monthly payments on practically everything that you pay every month. There’s a website (click this link) that you can enroll in a program, that verifies, reports historical payments, and also has a bill-pay service that reports the current and future payments. The beauty of this is that this shows what the traditional credit reports do not: an accurate payment history. You can have things like rent, utilities, day care, storage, insurance, phone, cell phone, anything that you pay a month that you receive a statement for. The information reported is compiled in what’s call a Bill Payment Score, or BPS. Under the FCRA (Fair Credit Reporting Act) you can have this taken into consideration when lenders are reviewing your credit to give an accurate picture of what your credit is really like.
First, never use more than 30% of your limit. It seems like if you have a $1,000 card you should be able to go charge up $700-900 no problem, but this wreaks havoc on you. Your credit score is partly based on utilization ratio, and you want to stay under 30%. Second, you’d be suprised how much it can throw you off when they tack on the interst at the end of a billing period. Your cushion can disapear and you end up paying an overlimit fee even though it was THEIR interest that put you over….. just keep the balance low!!
Only charge what you can pay in full at the end of the cycle– dont go into debt so you can go out for dinner or go to the movies– it adds up SO fast and you have nothing to show for your debt.
u should on use the card for things u really need, other than that pay with cash.. U don’t want to be in debt and pay your bill on time.. GOOD LUCk