Whether you are just starting out with a credit card or you’ve been through the ringer time after time, there’s a lot to be learned and carried with you. You can save yourself a lot of heartache and financial hardship if you practice good spending and saving habits from the very beginning. Even if you didn’t get off on the right foot with your first credit card, you can still make up for lost time by paying off your credit card debt and starting fresh with a new and improved outlook.
Everyone from college students to mature adults can benefit from good credit card behavior. Consider these top 10 important credit card best practices to help you along.
1. Don’t borrow (read: spend) what you can’t afford to pay back right away. If by your next paycheck you still cannot afford to pay back whatever you put on your credit card, it’s most responsible to avoid charging the purchase in the first place. Cases of personal emergency may be unavoidable, but impulse spending should be strongly avoided.
2. Pay off your balance on time, every time. If you allow your card balance to come due without paying it on time, this can spiral fast into massive credit card debt based on all the fees and interest that will add to your account.
3. Pay off your balance in full as often as possible. If you can make a habit of paying off your credit card balance in full and on time every time, you should have very few if any credit card related debt issues or finance charges. This is a great practice toward building excellent credit.
4. Avoid sharing your credit card with others and don’t make phone purchases in public places. It is important to keep your credit card information private to avoid identity theft and credit card fraud. Don’t read your credit card numbers aloud when paying bills or making purchases on the phone at work, school, or in other public places.
5. Check your credit card statement every month to watch for suspicious charges. This way you can quickly identify unauthorized purchases and often reverse them.
6. Use caution when paying for subscription services such as magazines and shop-at-home purchases via credit card. Sometimes these companies retain your credit card data and may continue charging you beyond your intended subscription length.
7. Always ensure the https: or lock icon is present when making purchases online. Better yet, shop only on secure sites you know and recognize, and if necessary, do your homework before shopping somewhere new.
8. Look for a credit card that offers a rewards program. If you are going to be making purchases with a credit card, you might as well earn cash back, airline miles, free hotel stays, or other rewards based on your spending habits. These rewards can add up quickly – often to totals of $300 per year or more!
9. Know the details and the fine print. Stay within your credit limit (line of credit), understand the fees you may encounter, and watch out for those convenience checks. The more you educate yourself about your credit cards and what they offer, the better suited you will be to make the most of them without incurring major credit card debt.
10. When in doubt, call your credit card company. VISA, MasterCard, Discover, AmEx, and all the credit card issuers have customer service representatives available to take your calls and willing to address your questions and concerns.
These credit card tips and best practices should help you to build favorable credit. Being responsible in your credit card purchases is the first step in avoiding future credit card debt. Consider these tips for yourself and share them with others you know to ensure smart borrowing and spending. In the future, you will be very thankful for your responsible credit history!