Best Credit Card Hacks that You Need to Know
A credit card is a type of payment that is very popular among many people these days. You can use this card for paying any of your daily needs, including groceries, restaurants, laundry, and any other things. This credit card allows you to use your credit balance and pay back the credit at the end of the period. However, you need to learn about how you can use this credit card very carefully. There are some useful tips that you can follow, so you can get all the benefits from this credit card. You will be able to manage your budget easily when you can manage your credit card use and payment effectively.
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a. Don't miss a single payment
This is the most important thing that you have to know, especially if you want to get all the benefits from your credit card. When you miss the monthly payment or have a late payment, your credit score will be lowered significantly. As a result, you will be charged at a very expensive interest rate from any lenders. The interest is going to increase from day to day, especially when you are late in paying your credit. Payment history will be an important part of your credit score.
b. Pay at least 70% of the balance
If you want to get all the benefits from your credit card, you need to learn about how you can manage the budget inside your credit card effectively. It is a good idea for you to pay at least 70% of your balance from your credit card before the next bill is due. Most lenders and card issuers usually want to see that the utilization is lower than 30%. A high utilization rate can send the message that you are using too much credit on your credit card. The total amount used in your credit card can affect your credit score.
c. Pay more than the minimum payment
All credit card bills usually have minimum payment for all customers. Making minimum payment is good for avoiding the incur late fees. However, monthly minimum payment is going to produce variable interest from your bank. The interest rate will vary from 15% to 25%. This interest will trap you in a cycle of debt that can be very difficult to escape. If you want to avoid costly interest, you should consider paying full or more than the minimum payment for your monthly bill.
d. Always keep your credit cards active
Although you have some credit cards that you don't want to use anymore, you still want to keep those credit cards active. The overall age of your credit will be an important and crucial component of your credit score. Even if you do not need the credit card anymore, you still need to use it for something small, such as gas or soda. You can maintain a good credit score in your credit report, especially when you have some active credit cards in your pocket.
e. Use the credit consolidation procedure
If you have some credit cards with a high interest rate, you may want to consider consolidating this debt with the balance transfer credit card. This procedure allows you to move your high-interest debt to your credit card. The overall payment period may take up to 18 – 24 months. It can give you a lot of time for paying off your debt without having to pay the expensive interest. This credit consolidation procedure is very effective to help you avoid high interest rate in your loan. Make sure that you ask your credit card providers, to ask about their balance transfer procedure.
When you have some credit cards in your pocket, you have to learn about how you can manage and handle all debts from these credit cards. Managing your debt is an important thing that you have to do, especially if you want to have a successful financial management in your daily life. You can also increase your credit health significantly by having a good credit card management process. You must check the monthly bills regularly, so you will never miss any monthly payments that should be done every month.