Being one of the best tools for building and repairing credit, it would not be wrong to say that credit cards with their rise in popularity have become the need of the hour. When it comes to using the credit cards, maintaining a good credit score is also important. And, in order to do that you need to make timely payments and should maintain a credit card utilization rate. So, whenever you choose a credit card, always keep the following do’s and don’ts in mind which are mentioned below:
Research cards based on your credit score
Before getting a card, it is highly important to know your credit score. Thus, in order top get a card that suits you well, you need to always check your credit score first. Depending upon your credit score, the credit card issuers provide you with the card to fulfill your varied needs. Credit score plays a pivotable role in deciding your eligibility for the card. So, its better to research such cards that suit your credit score.
Consider choosing a secured credit card to start.
If you are having the bad credit history or if you are rebuilding your credit after various damaging events like foreclosure or bankruptcy, opting for a secured credit card is surely a smart move. A secured credit card is backed by a security deposit you provide, thus which serves as a buffer against you on defaulting the payment.
With the help of the credit card reviews, you can easily know which credit card is toping the charts, and which one people are avoiding to take. Reviews help you in giving the insight of the industry and let you know the most trending credit cards that are making customers happy.
Consider your spending personality
If you are a frequent traveler, you should always pick among the best travel credit cards instead of selecting from the shopping cards. You should always decide your needs or requirements first, then select a card so as to get the maximum benefits. Just like a shopaholic should go for a credit card which is meant for the shopping purpose.
Read the fine print
Before applying for a card, always through read its terms and conditions in detail so as to avoid the confusion later. You should be clear about the terms and conditions of the card so that these things won’t create a problem for you in the future.
Watch your credit utilization rate
If experts are to be believed, they always say that one should keep his/her overall credit card balance under 30% of his/her available credit limit if it can be possible. One should neither over use his card nor it should be less used. You need to maintain a balance so as to stay away from various sorts of charges in the future for using more or less your credit card.
Automatically apply for the first credit card offer you see
However, just because a card looks good and appeals to you, it does not mean that it suits your pocket or needs. Also, it is not necessary that you are eligible for it, and will meet its others terms. You need to do the thorough research before applying for a specific card. Not only this, in fact you should do the comparison, and take your time to finalize a credit card, instead of getting trapped in the lucrative deals and offers.
Miss a payment
Don’t miss even a single payment because even a single one can make a huge difference on your credit score. Yes, it is absolutely important to make the timely payments so that your credit score will remain untouched,and it will only increases, instead of coming down. However, if it is difficult for you to remember the due date of payments, you can opt for automatic payment deduction service or email alerts that will remind you to pay your credit card bills on time.
Carry over a balance to build credit
Moreover, it is not mandatory to carry forward the balance from month to month in order to build your credit health. Yes, especially if you are capable enough to pay off all your dues at a time every month so as to avoid the late interest payments. However, if your bill is too large, paying more than your minimum payments can still be reduce your accrued interest.
Close your other cards
Just because you are getting great offers and deals on some cash-back credit card, it does not mean that you need to close your other cards. If you are having a lengthy credit history with an old card of yours, you should keep that card with you as to maintain an endearing relationship with the bank as it affects your CIBIL.
Apply for multiple cards at once
When you apply for multiple cards at once, it not just makes you look desperate but creates a negative impact on your credit score as well. You should do the thorough research first, and apply for just one card at a time. Yes, because if you don’t follow the same, it will affect your credit score adversely, and lower your score.
Max out your credit cards
The rate of your credit card utilization will skyrocket, lead to lower credit score, thus making it more tedious to pay off your balances.