Managing your credit and credit card usage is a tricky thing. Credit cards can make your life easier or harder depending on how you use them. Credit card companies offer you great deals, low APRs, etc. and then bind you up with complex terms and conditions in the fine print.
Of course, the credit card companies are counting on the fact that many people don?t read the fine print. They see these great offers, and they immediately want to apply. They also count on the fact that even if people read the fine print, the rules and regulations are so complex, most customers will screw up and see their APRs skyrocket.
Of course, if you?re one of the more responsible credit card users, you?ve never missed a payment, or paid late, you keep a low balance on the credit card and you pay off your purchases each month, then you?re golden! Until you get that notice in the mail saying there?s a change in the APR across the board for all users. And suddenly all of your good behavior through the years still results in an 18.99% interest rate.
And that is why credit cards are both useful and useless. If you have a big expense, but can?t pay it all up front, or an emergency situation arises, a credit card can save your butt. But it?s important to remember that no matter what, credit card companies are businesses ? and they?re in it to make money. So no matter how good their offer, they still have a way to make money from you.
Avoiding credit card issues is a simple matter of avoiding credit cards all together. Of course, that?s not always feasible for people, since credit cards can be a useful tool and help build your credit score. If you absolutely must have a credit card, it?s important to at least go about getting one the right way.
As with any financial decision, make sure you do your research. Find the best offers, get your credit score so you have an idea of whether credit card companies will like you (and therefore give you a good interest rate) and make sure your credit report is accurate. All these things can make or break your credit card using experience.
Once you?ve found an offer or two you like, call the companies to ask questions and get details. No matter how intensely you read that fine print, you should still need information about the credit card. Even if it?s just to make sure you understand the conditions. Credit card reps get paid to help customers, so take advantage of that.
Finally, try not to get a higher credit limit than absolutely necessary. Knowing you have $5,000 in credit on your credit cards isn?t really a temptation you want to deal with. If you are approved for the credit card and they give you a high limit, you should ask them to lower it to what you?d reasonably need. This will keep finance charges in check and help you manage your money and credit cards better.
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