How to Use Credit Cards Responsibly

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How to Use Credit Cards Responsibly
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Monitor Your Credit Scores Before you even apply
for a credit card, sign up for a credit
monitoring service and keep tabs on your score.
Especially when teaching young, first-time card
holders, tracking their credit scores is a great
way to improve them and to learn how credit
actions affect them.
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Maintain Modest Balances The most important step
you can take in managing your credit responsibly,
is keeping your balances modest. Most experts
believe that keeping your cards at 2/3 their
capacity or less is smart credit use.
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Pay On Time Paying your credit cards on time is
crucial to maintaining a high credit score and
not accumulating late fees. Most credit card
companies can help you set up automatic payments,
so youll never be late again.
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Use Credit as a Back-Up Many people, especially
kids learning about and opening their first
credit card, make the mistake of using it like
free, extra money. Before using credit, be sure
to calculate whether or not you will be able to
make the payments down the road and use it only
when you cant come up with the cash up front.
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Check Your Statements Just like your bank
account, your credit card account should be
checked each month. This ensures you catch any
unauthorized purchases and helps you remember
where youre at in terms of credit balances.
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Dont Transfer Balances It might be tempting to
continuously transfer a balance from one card to
another, but this doesnt help you pay it off any
sooner. Pay off higher interest rate cards first
and dont apply for new cards until you can
manage the balances you already have.
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Think Long-Term A lesson every beginning card
holder should learn is that credit is not instant
gratification, but a long-term commitment. Every
credit card transaction is something you will
need to pay off every month for some time, so
dont swipe that card lightly.
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Three Cards is Enough With all those instant
approval credit cards, its easy to start
accumulating a pile of them, but the more you
have, the worse it is for your credit scores and
your finances. Experts recommending having no
more than two or three cards at most.
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Your Credit is Sacred As with anything that
costs you money yet allows you to get the things
you need, your credit is an important piece of
your financial persona. For this reason, take
care to use it responsibly, so that it can take
care of you when you need it most.