5 Clever Ways of Managing Your Credit Cards
Credit cards are often called a bane of our society, an unhealthy habit that drags people into debt; self-help gurus urge us to cut them into pieces and behave as if they don’t exist at all. But truth is, there is nothing demonic about credit cards – they are just a tool, a tool you should learn how to use. Here are 5 simple rules that can do the trick.
1. Keep Track of All Your Accounts
If you have multiple credit cards you should carefully look after each of them. You may simply forget that you have an unpaid debt on one of them, and the resulting interest may unpleasantly surprise you later. Banks may change the terms of use – and although they are supposed to notify you 15 days prior, these notifications are easily missed.
So, make a list of all your credit cards, create accounts with the necessary banks and make it a rule to check them at least once a week.
2. Keep to Low Interest Cards
When one sees hundreds of offers out there, one’s head starts swimming and it is very simple to just pick credit cards at random, laboring under the delusion that they are all more or less the same.
They aren’t. Some offers are better, some are significantly worse. Fortunately, there is no need to compare all of them manually: you may use studies and lists compiled by specialists, like this one by Move Your Money Project, and keep to credit cards that offer the best terms of use.
3. Keep Your Balances Low
In the ages past, it was possible to use up limits of your credit cards and be happy as long as you didn’t go over them. Today it is not such a bright idea anymore – by maxing up your credit cards you decrease your credit rating, which means that the next time you are going to take a loan you will get higher interest rates, and your insurance premiums are going to cost more as well.
Thus, you shouldn’t go over 30% of your credit card limit at any given time.
4. Request Limit Increase
To use up less of your limit, why not increase the limit itself? If your credit history is spotless, you may try to persuade the bank to increase it – just make sure it really is spotless, for such a request from you may trigger an inquiry from the bank.
5. Ask for Rate Decrease
If you’ve had an account for a long time and always paid up on time, you may ask the bank to decrease your interest rate – especially if it is higher than average. Do your homework: look through your credit history, check the average rate at the moment and contact your bank. Don’t be shy – if your record is good, it may be arranged.
If you know how to use credit cards, they may be used for their primary reason: making your life more comfortable. They are a tool; if you hurt yourself with a tool you have no one but yourself to blame.
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