Tips For Responsible Credit Card Use

These days it seems the use of credit is running rampant. So many people are purchasing things they don't have the money for. This is quickly ensuring a generation of people who will spend a majority of what they earn just to may down their debt, instead of using their hard-earned money for other things.

Credit is an important part of buying the necessities in life, such as a home, or a vehicle. The more credit you're able the build, the better, so a credit card is an easy avenue to get there. Credit used irresponsibly, however, can do serious harm to your credit status. Therefore, a serious look at responsible credit card use is important.

The first thing to remember when using your new credit card is to go by a budget. Decide just how much you can comfortably afford to absorb and try not to go over this total. Just because you have a limit of $5000, doesn't mean you should max this number out each month. It is ultimately your money that you are spending, so keep this in mind when developing a budget.

Pay the full balance on your card as often as possible. If you are sticking to your monthly budget, this shouldn't be a problem. Keeping your balance paid in full will ultimately boost your credit rating much quicker, as creditors will see you as a much lower credit risk. Paying in full will also help you to avoid costly interest charges. Paying just a minimum monthly payment will ultimately cost you many times over in interest charges, so it is important to pay your balance in full to avoid those extra charges.

Pay close attention to your statements. Credit companies can normally change interest rates with advance notice. Read your statements thoroughly to ensure you're well aware of any changes in your account and act accordingly.

Keep track of the due date for payment and be sure never to be late in making your payment. This is where credit companies earn a majority of their profits. They will charge a late fee, even for being one day late with your payment. Always try to get your payment in well in advance to avoid a late fee.

Save all of your transaction receipts. Hold onto your receipts and check them against your monthly statement to ensure there are no mistakes. This will ensure you have physical proof in case the listing in your statement does not match up with your receipt. The last thing you want is to pay extra for something because you misplaced your receipt.

Never give your PIN number to anyone. There is no valid reason for a bank, credit card company, or any merchant to request your PIN number. Disclosure of your PIN number can lead to credit card fraud and the possibility of you being stuck with charges you never made.

When paying with your card, keep a keen eye on the merchant accepting it. Be on the look out for any suspicious activity. Card skimming is becoming a highly lucrative form of fraud and could potentially cost you a lot of money if you are hit. If you suspect you have been the victim of skimming, or any other form of credit card fraud, contact your credit card company immediately to have it deactivated.

Following the tips outlined above should help you make responsible choices when using your credit card and will hopefully help you avoid pitfalls many do not. A credit card is a very convenient tool when used responsibly.
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Which Credit Card Should You Opt To Use?

Chances are you obtained your credit card because a salesman hailed you in a shopping mall and tossed an attractive prize your way. But is the card right for your needs, as well as for your spending and borrowing patterns? There are two reasons to take a second look at our credit cards now. First, the card market has become more competitive in recent years and you can now take advantage of the latest offers and variations. Second, the ubiquitous credit card is becoming a bigger part of our daily lives. At such high usage levels, the right card could give you hundreds of dollar in savings a year. While there is no one best credit card, there are cards that stand out from the crowd in terms of rewarding you and giving you better savings and there are cards that are right for you based on how you use your plastic. With most cards offering a 20-day, interest-free grace period and late-payment fees, individuals who like to settle their credit card debts in full should opt for cards that provide savings in other forms. For instance, look for a card that has no annual fee and rewards you for spending money. Always read the fine print - several cards are offering 'free for life' deals that come with conditions. For instance, you might have to use the card for a specified number of times or spend a certain amount per annum. If you are in the habit of carrying a substantial balance on your card, forget about 'free for life' cards or bountiful reward programs. Just being in the habit of owing $1,000 on your credit card alone can cost you twice as much a year as the standard annual fees out there. You need to look for a card that minimizes the interest you pay.
That means looking for cards that charge less than the annual 18% industry rate on your outstanding balance and/or cards that give you a rebate on the interest you are charged. What if you pay high value purchases in installments? There are two options available with credit cards. One is offered by associated merchants and is interest-free if you complete payment within the specified tenure. There are also 'flexi-payment' plans provided by the card issuer, and these either have a one-time processing fee or an interest charge. You should find a card that is associated with many merchants since this provides you with the most opportunities to utilize the interest-free installment plan.

In some cases, you may have to pay a processing fee to use this scheme. The best card should then incur lower processing fees if any, to use this plan, while offering long payment tenure. On the other hand, if you prefer flexi-payment, look for a card that charges the lowest interest rate or processing fee and has a good choice of installment time frames.

Remember to compare apples with apples and annualize flat processing fees if you are comparing them with interest rates. To encourage consumers to spend on their particular card, banks give incentives in the form of cash-backs and gifts. Which should you go for? Here's a tip - most gift reward programs give you around 0.5% of every dollar spent. So, it's suitable for the big spenders. If you don't charge a lot to your credit cards, it's wiser to just go for a card with no annual fees.
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