5 Credit Card Hints And Tips

Australians are in love with their credit cards and literally billions of dollars every year are slapped on the plastic. But failing to manage your credit card repayments or over-extending their use can lead to some harsh financial consequences. Be very wary of how you use them as well. Using a credit card to pay off other credit – whether it is cash loans or credit on a betting website where you backed a hot horse racing tip – is unwise. The interest rates applied to credit cards are much higher than other forms of credit. Here are some hints and tips to help you stay in control of your spending.

Know your credit card

How many of us actually understand every detail about our credit card? Probably very few. The fine print and often reams of paperwork associated with applying for a credit card hardly make for light reading. But it pays to understand exactly what you are getting yourself into. You need to be on top of how much interest is charged – for both purchases and cash advances – and when it kicks in after the transaction. Being aware of fees and interest-free days is also something that needs to be addressed. And with so many cards being linked to rewards programs, it is important that you understand exactly how much you are going to need to spend to actually get anything in return.

Make regular repayments

Treat your credit card like a loan – it needs a repayment regularly otherwise you will fall behind. Factor in a credit card repayment each week, or each pay cycle. Make sure it is enough to cover past and future purchases, if possible. A little extra put onto the card can’t hurt – in fact, it can be quite handy.

Know your limit

There is no point getting a credit card with a sky high limit if you know you will struggle to make the repayments. While providers will conduct a credit check, quite often they have been criticised for handy out credit cards too readily. So know your limit and don’t be tempted to raise it later on because you have your eye on something expensive. It could well come back to haunt you.

Reduce the fees

Some credit cards can have annual fees of more than $300 so it can pay to hunt around for a better deal with lower annual costs. There are cards available that have no annual fees, but generally any fees go hand-in-hand with interest rates. So it is important to weigh up these two factors together rather than being enticed by just one. It can often mean the difference between a significant saving and another cost. Also be aware of any other fees your provider may charge, such as overdue fees and over limit fees. Do your best to avoid them, because they can start to add up.

Be wise with rewards cards

It’s hard to find a credit card these days that doesn’t have some kind of rewards program attached to it. Quite often it can take a lot of spending to receive even the smallest of rewards. So do your homework before being enticed by a card that promises a world of wonderful rewards – chances are it will take a long time to reap those rewards. There are many good rewards cards that can benefit credit card users who make regular payments and manage their card well.

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