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Keep Your Credit Cards From Wrecking Your Credit


on 5/15/2019

Young man shopping with credit cardWhen you start working and paying your own bills, it doesn’t take long to realize that a credit card is a necessary financial tool.  You need a credit card to complete many transactions even if you don’t need to go into debt.  Plus, without a credit card, your credit score may not be as high as it can be. 

With these benefits of credit cards, it’s important to make sure your use of that plastic does not cause you harm.  Practice these good credit card health habits to be sure having a credit card does you more good than bad. 

Don’t make credit cards into collectibles. 

While credit cards can come with many different perks and styles, you don’t want to get into the habit of collecting a bunch.  It can be easy to apply and get approved for a credit card.  Just look at your mail and there’s a good chance you’re receiving credit card offers regularly.  Don’t just start applying with every card issue, be selective and treat your choice of a card as a serious decision that could impact you for a long time to come.   

Find the features and benefits that best fit your needs.  Plus, consider the issuer.  What kind of support and service will they provide if you have any issues with your card?  Do you already have service experience or other accounts with the company?  How have they served you in the past?
 

Don’t view your card as the ticket to big spending.

Once you have a new credit card, it can feel like you suddenly have the ticket to a better lifestyle.  Don’t forget, you will need to pay off that splurge sometime. 

Treating yourself by purchasing something now that you otherwise have to wait for can be okay at times but life will be so much easier if you stick to buying what you can afford.  Set a budget for your card use, and know that you will have the funds to pay off the balance in the near future. 

Take advantage of the convenience that a credit card provides rather than giving into the urge to buy more than you should.

 

Don’t just pay the minimum balance every month. 

It can seem so easy to use your credit card when your bill shows a small minimum payment amount.  You should commit to paying more than the minimum payment every month.  If you just make the minimum balance, your next payment will first go to paying interest on your balance.  Only whatever is left over will go toward reducing your balance.   New purchases will get added to that remaining balance, and you may see a continuing increase in your balance and the amount of interest you pay. 

It can be okay to maintain a balance, but if your balance is growing closer to your credit limit every month, you could be heading for trouble. 
 

Don’t be late.

Paying on time may be the most important rule in preventing your credit card from ruining your credit score.  Know when your payment is due and set up a reminder on your smartphone for any bills you have to pay regularly. 

If you are late, you will have to pay wasteful late fees.  Skipping payments or paying bills late will usually cost you dearly.  It’s not worth it!  Stay on top of your payments and you’ll have better financial health in the long run. 
 

Don’t be Afraid to Ask for Help.

We all know that life happens.  Unfortunate surprises can occur that make using your card more tempting to use, and that’s one of the main benefits of a credit card – access to funds when you don’t have them.  If the problems cause you to have difficulty making your credit card payment, don’t try to run and hide.  Ask for help.  Contacting your card issuer sooner rather than later can make a big difference in options to get back on track to financial health.   
 

Don’t fret – plan!

A credit card can be a key to a healthy credit score if you:

  • Use the card regularly and responsibly

  • Make payments on time

  • Keep your outstanding balance under 30-40% of your credit card limit.

You will have much less anxiety about debt if you stick to these guidelines. 
 

Learn about and apply for your Genisys Rewards Credit MasterCard today.

 

© Genisys Credit Union and www.genisyscu.org, 2019. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Genisys Credit Union and www.genisyscu.org with appropriate and specific direction to the original content.

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