Just about anyone can tell you that charge cards have become an incredibly important financial tool for many consumers. The reality is, studies show that most Americans who are of age and able to have credit cards not only do have credit card accounts but that these Americans use their charge cards often. Unfortunately however, not all of the consumers who use charge card accounts use them properly. Improper use of charge cards can lead consumers right into financial hardship or even worse bankruptcy caused by out of control charge card debt. With that said, here are a few tips to help Americans with making sure to use their charge cards properly:
Tip #1: Never send charge card minimum payments: I would like to start this section by saying, the minimum payment for a credit card is exactly what it sounds like. It is the minimum amount of money that lenders are willing to accept as payment from Americans for their charge card account debts without penalty. However, this is not the maximum amount of money that consumers are allowed to pay when they pay their charge card account bills. As a matter of fact, people who consistently pay more than minimum payments on their credit cards often times enjoy the best rewards, interest rates and fees! Not to mention, consumers who pay more than their minimum charge card account payments will pay their credit card debts off early leading to less being charged in interest and finance charges.
Tip #2: Keep control of credit card balances: The most common mistake that Americans make when using credit cards is loosing control of the balances on their charge card accounts. With that said, it is important that people avoid overspending on their charge card accounts at all costs! It is a best practice for people to keep their charge card account balances below 50% of the spending limit offered on the credit card account. This does a couple of things. First, it helps to ensure that people will be able to pay their charge card account debts back by ensuring that they don?t spend more money than they can afford to pay. Also, studies show that the average consumers who spend more than 50% of their credit limit may be facing the early stages of financial hardship. Therefore, Americans who spend less than 50% of their credit card spending limits will enjoy better credit scores as a result!
Tip #3: Never pay credit cards on time: I know what most Americans who are reading this are probably thinking, ?What, if I don?t pay on time, I pay late fees and high interest rates on my charge card account!?. No, if you pay late, you pay fees and high APRs but, if you pay early, you are rewarded in more ways than one. First, by paying early, Americans will not have to pay the high default interest rates that come along with paying late! Also, when people pay their charge card bills early, they don?t have to worry about the added stress of paying them on the due date. Finally, consumers who pay their credit card bills early consistently, generally have better charge card account interest rates than those consumers who don?t! It is a best practice for Americans to get into the habit of paying their charge card account payments at least 2 weeks in advance!
I hope that I?ve answered any questions people may have had about using credit cards properly. For more information on this topic and other topics like it, please feel free to click one of the links below!
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