If you do not correctly manage your credit cards, then it may lead to credit card debt. Correctly manage your credit cards does not have to be hard. Below are five tips to correctly manage your credit cards.
1. Set up payment reminder.
The first tip to correctly manage your credit card is to set up a payment reminder. This is to avoid any late fees or interest charges. If you have more than one credit card, then remembering all of your bills can be difficult, especially so if you have online statements only and you don’t receive paper statements. I also schedule my credit card payment as soon as I can so that I do not forget.
2. Only buy what you can afford.
To correctly manage your credit cards and your spending you should, of course, only buy what you can actually afford. You should have a budget in place, and only buy items that can be fit into your budget. You don’t want to spend more money than you make each month, and you do not want to rack up credit card debt for things you can’t afford. That will just lead to credit card debt and interest charges. All of that can add up very quickly!
3. Pay off your balance in full each month.
If you do not want to pay unnecessary interest fees and late charges on your credit card each month, then you will want to pay off your balance in full each month. This is the correctly way to manage your credit cards.
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4. Don’t use more than 30% of your credit card limit.
If you want to watch your credit score, then you should always stay below 30% of your credit limit. So, if your credit card limit is $1,000, then you do not want to spend more than $300 on your credit card. Your utilization rate on your credit card plays into your credit score.
You also don’t want your utilization rate to get too high because you don’t want to max out your credit cards either.
5. Always review your credit card transactions.
At the end of each month, at the end of each week, or whatever works best for you, you should always review your credit card transactions. This is to make sure that you weren’t accidentally charged for a purchase, to make sure that you were charged the correct amounts, and so that you can make sure that no one has stolen your credit card.
What credit card management tips do you have to share?
Image via Flickr by moneyblognewz
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