Credit cards are incredible financial tools when used in a responsible manner. If you are capable of paying off your credit card balance in full every month, then you are getting the cheapest loans on the markets through your credit card, and that will get you ahead in your financial life.
So use the FREE credit card finder to find the right credit card that will give you freedom to prosper financially!
It is very important to research all your credit card options to get the best terms and conditions, including the lowest interest rates possible, low or no annual fees, minimal punitive charges, and the best rewards. If you invest some time in doing due diligence, it can help you save large amounts of money going forward. In other words, a little effort especially if you are just starting out will help you learn financial accountability while enjoying the use of a credit card.
The Advantages of Having a Credit Card
Credit cards are very convenient. That rectangular piece of plastic helps ease our lives in multiple ways such as:
- Eliminating the need to carry cash and checkbooks. With most businesses accepting credit cards, you don’t have to carry more than some emergency cash in your pocket. This is especially helpful if you have to make large purchases.
- Increased security. Most credit card companies will protect you against fraudulent charges made on your credit card. However, if you were to lose cash or have it stolen, the possibility of getting it back is minimal.
- Creates a record of expenditure. With credit cards, you have a record of all your purchases and returns. Such records can help you organize your budget, and query or block payments that appear suspicious.
- Perks, rewards and points. Most credit card companies offer some form of rewards to their customers, especially those who have good credit history and are responsible debtors. These rewards can be airline miles, points towards purchase of different products, gas rebate, cash back, as well as retail discounts. Some credit card companies also offer free travel insurance, extended warranties on products and no-fee transactions overseas.
- Online purchases. You can use your credit card to make purchases online in a secure manner. This gives you the option to comparison shop from the comfort of your home.
- Automatic payments. Credit cards allow and reward auto payments, wherein you can set up automatic payment for utility bills such as water, electricity, cable, and cell phone, among others. This helps you avoid late fees and other associated charges.
- Credit building. Credits cards are the cheapest means of building up your credit history. If you use your credit cards with impeccable care, you will be able to increase your FICO/credit score. Credit scores are very important numbers that can impact your future loans, your insurance deductible, and even your future job prospects.
FICO Scores — Three Numbers That Can Make or Break Your Financial Life
Now you know the advantages of having a credit card. But it is equally important to understand why using your credit card in a responsible manner is imperative to improve your financial wherewithal.
According to myFICO, your credit scores or FICO scores are used by credit card companies to risk of non-payment. There are three credit rating agencies, Experian, TransUnion, and Equifax, which assign your FICO scores.
According to Consumer Fraud Reporting, your credit report is made up various elements such as personal identifying information, your payment history, your existing credit accounts and loans, reported bankruptcies and late payments.
Your credit score is also influenced by your income, savings and assets, interest rates on active loans, and your spending patterns.
Your FICO scores are then used by lending companies to determine whether you should get credit, what form of credit (secured or unsecured), establish your credit limit, credit card APR etc.
In short, your FICO scores are very important for your financial well-being and should be carefully built as well as staunchly protected.
Raising Your FICO Scores
It is very important to monitor your FICO scores, and actively take measures, either to maintain your high scores, or push them up with responsible financial decisions. Some of the steps are:
- Always make your credit card payments on time, even if you are unable to meet your total monthly obligation. Try to pay the entire balance and if that is not possible, pay the maximum you can.
- Use your credit card sensibly and limit your impulse purchases to keep a low balance.
- If you have low or no-credit, get a secured credit card, which can be activated by depositing a specific sum of money. If you use this credit line in a sensible fashion, it will indicate financial responsibility and will raise your FICO score.
- Open and maintain a bank account. Make sure that you never go into overdraft and keep the minimum amount required by your bank.
- Make sure you meet all your financial obligations in a timely fashion, including payments on your mortgage, car loans, rent, and utility bills, among others.
It is your responsibility to make sure that all your transactions are being reported to the three credit rating agencies.
If you take all these steps, depending on your present situation, you will either strengthen your present financial situation or be able to improve your situation.
Choosing the Right Credit Card
In a nutshell, it is not just good terms and conditions of a credit card that will allow you to get ahead. Rather, it is the financial decisions you make in your life that determines where you go.
You can get some well-honed guidance if you use the FREE credit card chaser and get a credit card that will steer you in the right direction!