Practically Using Plastic – 5 Tips
February 23, 2009 – 4:57 pmPractically Using Plastic
Do you know of anyone who let their credit card purchases get a little out of hand? You probably do. In fact, with all of the instant approval credit cards these days – too many people have let their credit card situation get way out of hand.
Did you know that there are ways to use your plastic practically? It isn’t hard and it can certainly save you a great deal of money and headache. Here are a few ways to use your plastic practically.
1. Keep it simple. A common credit card misconception is that the more credit cards you have, the better. Although it is beneficial to have “a few” credit cards, it can hurt your credit to have too many credit cards. Not to mention the fact that it is hard to stay on top of that many credit lines. Start out with just one credit card. Use this credit card for small purchases. Get into the habit of paying off one credit card each and every month. After you have used this card responsibly for a while, you can add one or two credit cards to your wallet.
2. Stay informed. Not many consumers realize that there are many warning against having too many credit cards. The average consumer has anywhere between 8-10 credit cards. Common sense should tell you that that is too many. Each time you sign up for a credit card, you need to know vital information. Be sure to know exactly what all of the terms of the card are. What is the interest rate? What is the due date? Is the interest rate fixed? Is there an annual fee and how much is it? Are there any extra/hidden fees? Don’t enter into a credit card contract without knowing absolutely everything about the terms and conditions.
3. Be smart. Many consumers are completely smitten when they hear, “0% Interest for the first 12 months.” What they don’t realize is that the entire balance needs to be paid off by the time the first 12 months is over. If it isn’t, you could be nailed by extra fees and interest charges. These charges and fees could completely negate the benefit of having 0% interest for an entire year. Be smart with those interest payments and introductory offers.
4. Pay your bills…on time. There is no excuse to pay your credit card bill late-ever. Late payments can really bury you. If you have to remind yourself everyday for an entire month, do it. The extra hassle of staying on top of your bills will outweigh the cost of late payments.
5. Pay off the entire balance. Credit card companies thrive off of interest payments. Think back to the interest payments you’ve paid your credit card company over the past year. Is it enough for a small fortune? What would you do with that money if it hadn’t left your pocket? Pay off the entire balance every single month—no excuses.
It is time for Americans to start using their credit cards wisely. I can’t help but think how different the country’s situation would be if Americans were smarter with their purchases and finances. It’s time to start using your plastic practically.