Don’t go overboard with credit cards

Wondering how you are going to make use of your plastic? The following article shows you how.

08:16 25 December 2013

Your credit rating can take a beating if you make a hash of your credit card. Hence, prudent management of credit cards is your answer. It is important that you familiarise yourself with how your card works.

TIP #1

Do not close your credit card account haphazardly without knowing to what extent it is going to have an effect on your credit score. Sometimes, you might end up paying very much for carelessly closing your account without reading the clauses.

If you want to cancel your credit card account, you should make sure that you read the terms of service first. Read the very fine print so that you know all the nitty-gritty things that come with using the card.

TIP #2

Terms and conditions apply when you sign up for a credit card. Most card companies will offer you a bonus if you spend a particular amount within a given period. Paying off the minimum amount on the card balance is very counterproductive as it ensures you keep paying for a very long time.

To avoid getting bogged down in details you should ensure that you pay attention to the fine print before you append your signature to a credit card requisition form.

TIP #3

Always keep an eye on the interest. You do not want to be blindsided by astronomical interest rates. Hence, it is wise if you what the rates and fees for card are before getting one.

TIP #4

Pay attention to the balance that comes every month and know your limit. Going over the credit card limit is a sure way of acquiring huge amounts of credit card debt.

If you want to avoid the drama that comes with credit card debt, it is important that you keep track of how you use your credit card.