What is the first thing that comes to mind when talking about credit cards? Often it might be over-spending. But in reality credit cards can be quite beneficial. They can help increase your credit score, bring in bonuses such as air miles, travel benefits, etc.
Here are some tips on how to use your credit card and get the most out of it.
1. Read Card Agreement
When opening a new credit card account make sure that you thoroughly read everything in the contract. So you know the due dates, fees, interest rates.
2. Be on time with your payments
As the Consumer Financial Protection Bureau explains, you should make your payments on time, every time. Missed or late payments can affect your credit score and as a result, have an impact on your financial future. Setting up automatic payments can be useful.
3. Keep your debt level low.
Try to use as little as possible. Your total debt payments should be no more than 36% of your monthly income for a better credit score.
4. Monitor your bank accounts
Monitor your bank accounts and credit card accounts. Reconcile your statements regularly to make sure your records match. You can also check your accounts online to act fast if something is wrong.
5. Monitor your credit score
Monitoring your credit can help you keep track of where you stand.
Credit cards can be beneficial if used correctly.