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Best ways to use credit cards

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By: Anonymous
on 7th Mar,2015

Using credit cards is not very easy. Most of us don't know the rules of using the credit card.
Best ways to use credit cards

Using credit cards is not very easy. Most of us don't know the rules of using the credit card. As a result many of us end up with huge credit card debts which we can't pay. As a result, many of us have to file bankruptcy in order to get rid of the debts.

Some of the best ways to use credit cards are mentioned below which will encourage people to have healthy spending habits which will be helpful for both the new and experienced credit card users:

1. Take steps to build up a good credit: You should make sure that you pay your credit card bills on time and don't take too much debt on your cards. If you're able to maintain this, it will help you in establishing an excellent record. The information from your credit report will be used to calculate your credit score which will help you qualify for low-interest rates on other credit cards, mortgage and auto insurance.

2. Don't cross your credit limit: You should always stay within 30% of your credit limit. Most of us don't know that a large part of your credit score considers the amount of debt that we have. If the balances are low, it will help you maintain a good credit score. Also, lower balances will be easier to manage.

3. Guard your big purchases: As per the Fair Credit Billing Act, if you've purchased something damaged or defective using your credit card, you have the right to hold back the payment. You should try and dispute the matter with your merchant. But if you're unable to do so, your credit company will look into the problem. If the credit card company supports you, the charge won't be added to your bill. However, it should be noted that things bought by using debit cards are not covered under this Act. 

4. Don't make minimum payments on your card: If you make minimum payments on your credit card each month, then it will increase the amount of time that you need to pay off the debt. Making minimum payments will also increase the amount of interest you end up paying. Thus, in order to pay off the debts quickly, you should pay as much as possible on your balance each month.

5. Use credit cards to shop online: Online purchases are covered under the Fair Credit Billing Act. This will help you in shopping online using your credit cards. As far as the security is concerned, you'll find that a large number of credit card companies offer a "one-time use account number" for large purchases online. This will help you in keeping your real account number off of the web.

6. Inform creditors about late payments: If you're facing problems in paying off the credit card bills, then you should let your creditors know that in advance. Most creditors will help you if you inform them that you're about to miss your payments due to financial hardship. You should contact your creditor and explain the situation. Request him to waive off the late fees.
7. Request for a lower interest rate: If your current rate is higher, you can request for a lower interest rate. You should assess the interest rate on your credit card periodically so that you can be sure that you are getting the best deal possible.

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