Using credit wisely
Follow these tips to use credit wisely.
Instructions: Click each tip to learn more.
- Shop around for credit cards with low interest rates and low or no annual fee.
- Look closely at credit card offers that use the word “free.”
- Watch for rate changes after the “Introductory rate.”
- Usually, everything has a price. Avoid loans and credit cards with high interest rates.
- Don’t take on monthly loan payments you can’t afford.
Don’t use your credit card to buy things you really can’t afford. Let your budget be your guide. Resist impulse buying.
- Don’t exceed your credit card spending limit and try to keep your balance 70% or less of your limit.
- Avoid having monthly credit card payments that exceed 10% of your monthly net income.
- Don’t let the total amount you charge to your credit cards exceed 20% of your yearly net income.
- Maintaining a number of credit accounts over a long period of time can actually improve your credit score — but only if you limit your credit use.
- Track your credit card charges throughout the month.
- Save your receipts and check them against your statement.
- Track the charges made on your credit card online, before you even receive the bill in the mail.
- Pay on time.
- Pay off credit card balances monthly if you can.
- If you can’t pay off your credit card balance in full, pay more to your high-interest accounts every month while paying at least the minimum to lower-interest accounts.
- At the very least, pay the minimum payment to every account, every month, on time.
- If you can’t pay the minimum due on your credit card, call your creditor and ask for an extension or to set up a payment plan.
- Try to have you APR lowered, too, which may reduce your payment.
- If nothing can be done, look for money in your overall spending plan that you can put toward your payment.
- If you’re getting into trouble with debt, get help early. Contact your lender.
- Try to work out a repayment plan that works for both of you.
- You may also want to consider talking with a credit counselor, an experienced professional, who can help you develop a plan to get out of debt.
Note: The key to financial freedom is living within your income. That means not borrowing more than you can comfortably afford to repay.
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