How to manage your Credit more effectively
Having credit is not all bad if managed correctly, whether it allows you to buy that dream house, get you out of tight spot or be used to build yourself a solid credit rating. Poor management however, are where problems can arise.
Some basic pointers when using credit:
- Only buy what you can afford to repay - One mantra i have always tried to use is this one. With the latest shiney gadgets, or must have accessories being paraded in our faces on a day to day basis, it can be difficult to resist the urge to spend. But, do you really need to make that purchase? The buy now, consider the consequences later attitude is not ideal when facing 16.9% APR charges!
- Make sure your payments are frequent and in full - If possible, always try to pay off your balances in full at the end of the month. Whether that is a credit card purchase, or your mortgage payments, the same rule applies. This enables you to both avoid any fees, and limit the amount of interest you pay to your credit supplier.
- Know your limits - If you have a £1,500 limit on your credit card, don’t go over it! You will probably pay through the nose for exceeding your limit.
- Keep track of your spending - Set up an online account that coincides with your credit card statements, that way you can quickly check your spend for that month and act accordingly. Most well known credit suppliers will be able to offer online account support.
- Keep an eye out for mistakes - Although many credit card companies offer insurance or protection against fraud, Credit card fraud does and will continue to exist for the foreseeable future. Keep a beady eye on your statements and check any unusual items out. Dont let any fraudulent purchases go unnoticed.
- Be sensible - Don’t apply for credit unless you really need it, or you are doing it for building your credit rating. Many people are under the impression they need credit, when in fact they don’t! Having that temptation there to spend can be problematic.
In the right hands, credit cards can be very useful, but unless you need to make a large purchase or are looking for the payment insurance - try and stick to cash or debit cards.
Comments
Tell me what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!
