Use Your Credit Card Wisely And Don't Get In Over Your Head

Before applying for a card there are several things you need to know and do

. A lot of banks will offer you cards but the APR which is the amount of money one has to pay in interest charges per year; can be very high especially for the first card you get. Choosing the best card for you, apply for it and getting it can be a difficult process, but it is important to make your best selection and get a credit card with a good APR. After you got a credit card other issues like how to use your card wisely or how not to get in over your head, arise. As easy as it is to spend and use the money you have in your account plus the ones that you do not have but the bank lets you use, turns out to be as difficult to put them back and to repay the debt. Most of the credit cards have a maximum amount that you can spend when you do not have any money in your account. The sum can be 500, 1000, 2000 or up depending on your credit history. Spending more than you can afford usually happens when you get your first credit card, but this is not a must for all the credit card holders.

In fact even banks and credit card companies offer tips on how to use your credit card wisely and what to do and not do with it. Some of the things you have to keep in mind when you have a credit card are the reasons you applied for a credit card and how much are you going to be able to pay back in case you use more than you have in your account. The amount that you can repay depends on your monthly expenses and also on how much money you earn. The first credit card you use should be one to help you pay your bills in time and help you create a good credit history. You can use small amounts from your maximum amount, but make sure you don't use more than you can afford to repay. It is very important for your credit card score and thus for getting a credit card with a better APR and a bigger maximum amount, that you are able to make payments on time.

When you use your card try to keep the slips and receipts till you get your balance so that you can compare them. You should keep a confirmation payment especially if you are paying your bill in the last possible moment. Remember that it might take a while for the transaction to appear as completed in your bank statement. If you have more than one credit card, but even if you only have one, keep the bank numbers and your card number in a safe place so that you can call them and block the card in case you lose it or it gets stolen. Since card fraud is more and more common make sure you keep your personal information as safe as possible and do not share your card or PIN with anybody else. A good example of using your card wisely is not using your credit card all the time and in all the places. Try to prioritize your credit card expenses and try to use it only with companies you trust.

Just because you have a card it doesn't mean you can buy anything you want whenever you want. This is exactly the way most of the people get in over their head when they have a card and then they have to do all kind of things like applying for another credit card to pay their first card or applying for a loan to cover the expenses made with the card. The problem is that if you have troubles with your first card the second one you have will have bigger fees and interest rates than the first one and the loan if you are lucky enough to get one will have high interests too. Remember that financial institutions never lose. Also always check your bank statements. Banks can make mistakes too. If something is wrong go and talk to them and try to fix it. If you used some of the money from your card and you have a debt to pay back try to pay more than the monthly minimum amount due. This means that the more and faster you pay your debt back the smaller the interest that you have to pay will be. If you think you can manage with more than one card, try to limit yourself to two cards. If you are using one card wisely it doesn't mean owning a second one or more than that won't make you get in over your head. Spending money is always easy even if you have it or not.

by: Paul Ingersole

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