Article By : Patrick Mansfield | U.S. Consumer Finance
Credit cards can work quite well for you if know how to use them. The following is a simple breakdown of five tips that can help you use your credit cards in a strategic manner That Will Help Your Credit Score And Keep Debt Down.
1. Stay Within the Credit Lines:
Staying within the line means that you should stay above a zero balance but below your credit limit. The credit card cannot effectively help your credit score if you do not use it, but you should never use every penny that the card offers. The best spending range to stay in is 20-30 percent of your credit limit. That makes you appear to be a responsible spender who isn’t swimming in debt or poverty-ridden and desperate for the cash that is on the card.
2. Pay More Than Minimum Due.
Paying the minimum each month keeps you afloat, but it is not very proactive. Paying extra each month can help you to get ahead. It shows your willingness to take care of your obligations. It can also reduce the next month's payment and the way that your payment is distributed to the interest and principle. Doubling up each month is a good idea for a quick pay-down and a bump in your credit score.
3. Avoid Costly Errors:
One thing that kills a person’s credit score and wallet more than anything else does is an unnecessary charge. Over-the-limit fees and late payment fees can throw your credit cards and their account balances into a never-ending tailspin. If you do nothing else during the entire time that you own a credit card, you should at least avoid going over your credit limit and paying late. Other fees that may sneak up on you are annual fees and foreign transaction fees. You should watch out very closely for such things.
4. Pay your Bills on Time:
Late payments are the most detrimental to your credit score out of all negative things. Your payments make up about 35 percent of your total credit score. Therefore, you must strive to always pay your credit cards on time. Once your credit score starts to sink, you will have a difficult time swimming out of the financial quicksand without a specialty lawyer's assistance. Make sure that you pay your bill on time every time, and your credit score will grow over time. You will gain the trust of new creditors if you conduct yourself that way.
5. Monitor Your Account:
Finally, you should monitor your account frequently. Most credit card companies offer their customers the benefit of online services. An online account gives you instant access to information about your balance, expenses, payments and the like. You will receive updates about terms-and-agreements changes, as well. The online site will provide you with information on interest rate changes, annual fee adjustments, cash advance charges and the like. You can then adjust your payment schedule accordingly.