Managing credit card debt seems like a matter of common sense…until you realize that we have spent an estimated $887 billion in debt and have increased our debt 13% in 2022. Financial experts say it’s the fastest rise in more than 20 years.
Where do people go wrong? Usually it’s because we don’t stop to read the fine print of the contract – and we also avoid planning ahead for our finances, right down to the last date and dollar.
In this article, we’re going to consider some helpful tips on managing credit cards effectively so that they work for you and not against you.
1. Read Your Card Agreement Closely
The first thing you should do before you sign up for a credit card with any company is make sure you understand the fine print before signing. This involves deeper research (possibly on your own time before you make it to the bank) and full comprehension of the terms and limits of the contract.
This will help to know what to expect as far as fees, due dates, and interest rates, as well as other pertinent information.
2. Set Up Automatic Payments to Avoid Late Charges
It’s imperative to pay your bills on time, especially with credit card companies. Setting up automatic payments on what you know you can pay is also useful for those who may forget to pay their bills manually on time. According to the Consumer Financial Protection Bureau (CFPB) you should be extra careful to see that your credit payments are paid on time to avoid future debt and potential bankruptcies.
3. Explore Options for Consumers With Bad Credit
If you have bad credit and are unsure of which credit card company to go with, it’s best to go for credit cards that offer no minimum deposit.
There are options for anyone who has bad credit.
No minimum deposit credit cards might include MasterCard’s Premier Bankcard, Premier Bankcard Grey Credit Card, the Surge MasterCard, Reflex MasterCard, Indigo MasterCard credit card, Total Visa card, and Merrick Bank Double Your Line MasterCard.
Using a no minimum deposit credit card will help you financially if you have bad credit.
4. Pay More Than the Minimum
Paying more than the minimum on your credit cards keeps you from having a leftover balance. This also keeps you from being charged interest on the leftover balance.
Only paying the minimum and having a balance can make it hard to pay off debt in the long run. That’s why the CFPB recommends you make sure to pay off your monthly balance when you can and pay a little more if you can to avoid accruing interest.
If you’re in the Pacific area, a quick search for reputable California debt relief companies near you will help you find an expert to help you formulate a plan and find debt relief programs.
5. Stay Within Or Below Your Credit Limit
When it comes to credit, make sure to spend only that which you need, or ideally less than what your credit limit states. This is because your credit score can easily be affected by your credit utilization ratio – how much of your available credit you use.
The lower your credit utilization ratio, the healthier your credit score may end up being. The CFPB recommends using no more than 30% of your credit limit.
6. Reconcile Your Monthly Statements for Accuracy
Keeping track of your monthly statements as they come in, either online or as they come in the mail, is a great way to keep your peace of mind regarding monthly expenses. This will also help you to spot fraudulent transactions as they come in, so you can stay on top of fraud reporting.
If you notice a suspicious charge in your statement, report it to your credit card issuer immediately so it can be taken care of on their end. In most cases, the amount can be reimbursed by the issuer as soon as reporting, or in a matter of business days.
Click here to read more about why reconciling your finances helps.
7. Report Lost or Stolen Cards Quickly
Nobody likes the feeling of having lost one of their cards, but if this happens to you, you should make sure that you report the lost or stolen card as soon as possible. This will help to keep your identity and assets safe upon receipt of your new card in the mail.
Most card issuers offer $0 fraud liability, which means there aren’t any hidden fees for reporting your card stolen and having to have it reissued. In some cases and with some issuers, you can also lock your card to keep it from being taken if it’s misplaced.
8. Use Credit Cards to Turn Around a Poor Credit Score
Using a credit card and keeping up with the minimum payments is one of the best ways to build good credit, because it shows how you manage credit over time. This can help you to file personal loans and large purchases like homes or cars.
Making sure that you pay the minimum and use only a small portion of your credit will also help you earn better credit as time goes on. You can apply for a credit card online and even check your application online for up to the minute results on final approval.
Credit cards are an important part of daily adult life but making sure you have one that fits your lifestyle and budget is important. Shopping around for credit cards can be a daunting task, as it hinges on your overall financial health throughout the years.
The more independent research you do prior to committing to a financial institution then the less chance you will fall into unexpected debt. Why not apply for a card today?