Given the convenience of credit cards, it’s no wonder that many people take the credit cards stashed in their wallets and pocketbooks for granted. It’s important to remember, however, that this powerful plastic is not just for making purchases; it is also essential for establishing and building good credit. Here are five tips for using a credit card:
•Know the Fees Associated with Your Credit Cards
From annual fees to foreign transaction fees, credit cards can be loaded with charges. Make sure you know exactly what fees your credit card charges, and plan accordingly before using your card overseas or for online purchases processed by foreign countries.
•Know Your Statement Closing Date
Knowing your statement closing date will help you avoid making a late payment. If you are paying your balance off in full every month, marking the closing date may also help you monitor your finances by delaying purchases so they appear on the following month’s billing cycle.
•Take Advantage of Credit Card Perks
Rewards cards offer cardholders the opportunity to accumulate points by using their credit cards for qualifying purchases. These points can often be redeemed in the form of gift certificates for department stores and dining, discounts on travel and entertainment, and even household goods.
•Don’t Use Your Credit Card too Much
Experts recommend spending no more than 30% of your credit limit each month. If you have the means, you should pay off your credit card on time and in full every month; this way, you will never incur any interest charges or acquire debt. However, it’s OK to carry a small outstanding balance on a card with a low interest rate—in fact, some experts say this can help build your credit.
•Don’t Give Your Account Number Over the Phone
Unless you have initiated the phone call, do not give your credit card number over the phone. Be cautious when using your credit card and keep it in a safe place to avoid having your credit card number and personal information stolen.