4 Tips for Managing a Credit Card Prudently
Credit card horror stories about people falling into massive, spiraling debt are a dime a dozen in today's world, which is one reason why many now fear credit cards altogether, and a growing number of people are now avoiding plastic entirely.
The truth is, however, that a credit card is nothing but a tool. And even though it is possible to misuse this tool and cause harm, it is also possible to use credit cards wisely, increasing your spending power and growing your credit score. Instead of allowing credit card disasters to scare you away from credit altogether, you should instead take them into consideration as cautionary tales, as resolve to use your credit card in a responsible manner. .
How you choose to manage your credit card will depend on your own personal finances; and you will also need to take in other factors such as your own ability to control impulse spending. But, regardless of these factors, there are a few general rules about credit card management that everyone should follow. Here are a few of the most important:
- 1. Pay on Time. Late payments will ruin your credit score and rack up costly fees. Be sure to plan ahead for payment each month, and set up automatic payments if at all possible.
- 2. Pay Over the Minimum. Some debt reduction experts recommend paying over the minimum every month ‐ even if some months you can only afford to pay a few extra dollars, this will add up while also providing a nice psychological boost.
- 3. Rewards add up. Credit card companies assume that most customers will not actively use the rewards programs that they offer. If you take the time to learn exactly how your rewards program works, you may be able to use it to your advantage.
- 4. Negotiate Rates. Especially for long term customers of the same bank, negotiating credit card rates is possible -- and it can save you a pretty penny with very little effort on your part.
Has your credit card debt gotten out of hand? Madison Monroe and Associates can help you get back on your feet. Visit us online today to learn how.