Credit: Useful Tips
Credit is helpful but you must be careful when borrowing money and must also be aware how to avoid pitfalls. Spending money is easy but a good borrower is that who can manage his debts well and pay them on time. Getting a credit card is not enough. You need to now how to use your credit, the interest you pay and how to manage your credit.
Credit cards can affect your buying power. You should be in control of your financial future so that you can avoid any hassles related to your credit. So, how can you use your credit card in a sensible manner? Here are a few tips:
•Keep a check on your borrowing habit. A sensible thing to do is never go beyond 20% of your annual after-tax income when borrowing money. Cut down the expenses that you can. Lenders cross check your debts to income ratio to have an idea about how you are with money.
•Sincerely try and pay your bills on time. If you can at least pay off the minimum amount due by the due date, you can avoid any late payment charges. This way you can put up a better credit report too.
•Avoid crossing your credit limit. Keep an eye on your statements regularly to remind yourself of your limit and the expenses that you make. If you are not receiving your statements then contact your credit card issuer and make sure they have your current address.
•Do not consider a cash advance till the last moment. Cash advance accrue finance charges from the day you withdraw the cash from your credit line. You also need to pay for this service.
•As you use your credit card, you are agreeing to abide by the terms and conditions attached to the card. When you purchase your credit card, make sure you read the fine print properly. There may be credit terms that you don’t understand. Ask your issuers to explain what you don’t understand in the document.
If you can manage your credit well, you can have a relaxed life when it comes to finances. Your credit report will be impressive too and your lenders will not have problems lending you more money in the future.
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