Tips On Building Good Credit
Types Of Credit Cards
There are hundreds of different options when it comes to choosing the right credit card. There are cards aimed specifically at students, travelers, different age groups, and even people with certain shopping preferences. The best option for a basic credit card is choosing one with low fees and a low interest rate. Remember that debit cards do not build credit, just like power, utility bills and monthly cell phone bills do not build credit. Credit cards from department stores and retail stores which can paid off in the future are also a way to build credit, but this is a slower option as you can only use it at one location. Any type of installment loan accounts also build credit.
Using a credit card occasionally is the safest way of building credit as heavily relying on credit for all you purchases can make it easy to lose track of your expenses. Swiping a credit card does not represent free money, but borrowed money that must be paid back later. Making swipes on your credit card for only certain types of expenses like ‘gas,’ or ‘groceries’ can help you use is sparingly and also keep track of those specific expenses.
Pay Bill On Time
Paying your credit card bill on time is a sure fire way to build good credit. Keep note of when the bill is due and read up on the information detailing how long it takes to process payments, based on payments received on a weekday or on the weekends. Late payments hurt your credit score.
Pay Off Entire Balance
People find themselves in credit card debt by avoiding this simple tip. It is all too easy to spend money freely as it is not yours, but you must acquaint yourself with a credit card as though it is a debit card, and be aware of current and future incomes at all times in relation to what you can and cannot afford. Having a credit card does not automatically make things affordable. Leaving a balance unpaid on your credit card means that that unpaid amount collects interest, translating to literally throwing money down the drain; spending money on spending money. It just doesn’t make sense and not paying the bill in FULL should be avoided at all costs. The price to pay in the future for not following this tip may be a burden and put a hindrance on your economic development.
A credit card is a modern day convenience which liberates a person from carrying cash and gives one the option of buying something with money they don’t have “right now.” Yet using a credit card should be done with caution as identity theft and fraud are associated with credit card usage. You should be wary of buying things online; make sure you are always using a secure connection, and it is always safest to execute transactions from your personal computer rather than a public computer on a large network. Be aware of your email account and never send your credit card information directly through email, also do not give away your email password to anyone or anywhere on the internet as your information and identity can then be easily accessed . Check your credit card statement each month to make sure each transaction was done by yourself, the account holder. Also, be aware when traveling as foreigners are most susceptible to fraud. Going paperless with online banking can also eliminate a physical paper trail which can help protect against fraud.
Importance of Credit
Even though it sounds like a lot of work, having a credit card can be a pleasure rather than a nightmare, if used with care. It is important to have credit to make big purchases for the future, like a car, a home, or for starting a business. Your credit score may also be taken into consideration on apartment rental applications, employment, and for car insurance premiums. Take the time to build a good or excellent credit score to make life easier in the future!
By: Eva Cantillo