Credit Card Tips

Credit cards make spending far more convenient for the consumer than writing checks or paying with cash. Nearly every business accepts credit cards, even fast food restaurants. So, more and more, people are utilizing their credit cards and leaving their cash and checks at home. But, there are some risks involved with using credit cards - namely the ability to easily creep further and further into debt without realizing it. Luckily, there are many steps a credit card holder can follow in order to prevent falling so far into debt that there is no way out.


Don't Ignore the Credit Limit
Nearly every credit card, whether they are airline credit cards, instant approval credit cards, reward credit cards, or credit cards for college students, has a credit limit. As a responsible cardholder, it is important to be aware of this credit limit and to never overspend. Going over the credit limit can result in hefty fees and also removes the freedom and flexibility a credit card allows because there is no room left for additional purchases. This can be particularly upsetting if an emergency situation should arise.

Some credit cards do not have a predetermined credit limit. For these cards, and even for cards that do have a set limit, it is a good idea to establish a personal credit limit. This credit limit should be well below the credit limit established by the credit card company. Remember, most credit card companies calculate the minimum monthly payment based on a percentage of the balance. Often, this is 2%. If the balance becomes too high, it may be difficult to pay the minimum balance.

Of course, paying just the minimum balance each month is not enough to get out of credit card debt. Therefore, the cardholder should take care to only charge what he or she is able to pay back within a reasonable time. In addition, the credit limit set by the credit cardholder should be substantially below the credit limit established by the credit card company. That way, there will always be room left on the card in case of an emergency.


Avoid Unnecessary Spending
Even cheap credit cards with low APRs and little or no fees can create an insurmountable credit card debt if not watched closely. It is easy for cardholders to get swept away by the shopping bug, particularly when it is so easy to do with a credit card. One way to avoid impulse shopping is to simply leave the credit card at home. Many people carry several credit cards with them at all times - this is only asking for trouble. Keeping the cards at home makes it easier to resist temptation. Of course, credit cards are good in emergency situations and, as such, many cardholders want to keep a card with them for this purpose. If this is the case, the cardholder should only carry a card with a low credit limit so large purchases cannot be made.

Cardholders also need to be weary of high-pressure sales. Radio and television ads are designed to make products seem irresistible. Cardholders should give it some time before deciding to make a purchase and allow themselves to think it through. In fact, shopping in general should be avoided for those that are shopaholics. The word "Sale" gets many cardholders' pulses racing. Consumers need to be sure to avoid making purchases just because they can save some money with a coupon or a discount. If this means avoiding the stores, then that is what needs to be done.

Another option is to use a secured credit card. Many credit cards for college students are secured. This means the money is sent to the credit card before it is used. Once the available money is used up, the card cannot be used anymore until more funds are added. These cards can make it much easier to keep track of expenses and prevent overspending. Credit cards with a low APR are also a good choice. These cheap credit cards help prevent creating large finance charges, which only serve to make the debt more difficult to overcome. Carrying only cash is another great way to keep credit card spending to a minimum.

Along with determining a personal credit limit, it is also a good idea to create a budget and to make a list of things that need to be purchased. Creating an itemized list with projected costs can help the cardholder determine what items really do not need to be purchased. The list should also be adhered to in order to prevent impulse buying. It is also a good idea to save receipts and to review them weekly and monthly. This gives the cardholder a good idea of how much he or she is truly spending on the credit card.


Choose the Right Card
There are many cards to choose from, but it is best to learn as much as possible about each card. For business owners, it is important to compare business credit cards. For those looking for a reward credit card, it is a good idea to sort through them to find the best cash back credit cards or best reward credit cards. On the other hand, those with balances on cards with high APRs should seek out the best balance transfer cards. The credit card should work for the cardholder, not against him. Therefore, the cardholder should actively seek the card that has the most to offer and that best fits his lifestyle.

Article found at www.creditcardassist.com/tips.html