Today, it is very common to see people doing transactions by means of a credit card. As a matter of fact, a large number of people deal with credit cards more often than they do with cash today. Of course, there must be reasons behind this. First, it has become pretty easy to obtain credit cards for the past few years. However, in fact, there are things which credit card owners are not recommended to do in the first place. They need to know how to use their credit cards wisely.
Speaking of how to use credit cards wisely, it is often the case that one thing credit card owners know in common is about avoiding bad credit record. Unfortunately, not many of them are really aware of how they may maintain good credit record. With that being said, it might turn out handy if those credit card owners out there have a look at this article. Here, we are going to reveal all those things, including things that should be done and things that should not be done, with regards to credit cards. All that has to be done is to sit back and relax while reading this article pretty carefully. Here are the details.
Think It Over
It is indeed important to think over and over again whether or not one should really obtain his/her own credit card. Unless a person has urgent needs of a credit card, he/she had better not even think about one. Things like getting paid via PayPal, doing shopping online or so can be considered as the conditions that make it urgent for someone to have his/her own credit card.
Watch the Age
The next important point is someone's age when he/she applies for a credit card. It is important to keep in mind that, in most cases, those who are under 21 years of age are not allowed to own a credit card. This applies unless they have someone to co-sign the agreement or that they have shown their paying ability.
Avoid Minimum Payment Temptation
When the bill comes, it is usually fine for banks in case a credit card owner pays only the minimum amount he/she is obliged to pay. This has often tempted quite a lot of credit card owners to make only this minimum payment. Unfortunately, without their realizing it, they are just getting themselves into more and more debts over time.
When a credit card owner makes a minimum payment only, he/she is going to be charged with interest by the bank in charge. Over time, the interest will increase. Unfortunately, due to this increase, most credit card owners often find it hard to pay off their debts. This is the main reason we recommend that credit card owners keep away themselves from minimum payment. Also, they must not avoid the bill and make no payment at all. This will cause interest as well and things will get just worse for the credit card owners themselves.
Make a Wise Choice
It is recommended that a person take into consideration several factors prior to applying for a particular credit card product. These factors include Annual Percentage Rate (APR) of a credit card, how interest is calculated, annual fees, all other charges – including any hidden charges, grace period, how much amount is the maximum amount available on a card and what other facilities are offered by a certain credit card product.
More Cards Are NOT Better
Some people believe that acquiring more than one credit card is good since they will have more money they can use. However, one thing that most of them may forget is that they are actually borrowing the money. And by using more credit cards, they are borrowing more money. By borrowing more money, chances are they may not be able to afford paying off their debts.
Another good thing with using a single credit card is that the reward points they earn will all go to one card instead of spreading over the cards. This way, it will be easier for them to collect enough reward points to exchange with something valuable.
Try NOT to Close Any Credit Card Accounts
There are not few people who choose to close their credit card accounts after a certain time period. Unfortunately, this will lower their credit score which is not good for their record.
Last but not least, reporting a lost or a stolen credit card right away is necessary.