Owning A Credit Card

In today’s present times, credit cards are considered valuable as money itself and not having it may seem to be unthinkable bearing in mind the need for us to provide for our family and pay for our prime needs.  Not having a credit card could also display a negative point to our credit score especially if they are a first time credit card or loan applicant. 

Getting a credit card for the first time or before now have a credit card for a while now but is not knowledgeable of how they use it, you may want to read several of the things you need to know about plastic money to save you the trouble or correct any mistakes in connection with credit cards.

Being late on paying your bill

Paying your credit card bills on time is a big advantage for you and your credit score.  If there will be an incident of you not being able to compensate it on schedule, however, you could appeal to your bank to offer you some sort of consideration and if you have a reputation of making on-time payments, they may go along with your appeal.  Late payments of credit card bills that occur on a regular basis does not only hurt your credit score, it will also have you slapped with extra penalties, fines and interest.

Missed payments

Just like behind payments, more interest fees and penalties are added to your debt.  For you to have a reliable credit record, you should prioritize paying your credit card on or before the due date.  The costof a missed or late credit card monthly payment include a £10 to £25 late fee charge.  Late payments are also reported to the credit bureaus and if you don’t improve this pattern it will greatly affect your credit history.  Furthermore, your interest rate will be likely increased to the default rate which is the highest interest rate your creditor is permitted to charge you with. 

On time payment is one of the most important things you can do with your financial reputation as 35% of your credit score is based on on time payments. 

Cash Advance

A cash advance should, as much as possible, only be used for emergencies or if you could pay for it before the due date.  The reason for this is because after you get the money from the machine, interest for that cash will start to pile-up and there is no grace period whatsoever. If you have an urgent situation such as buying a critically needed medicine, you could first ask if they accept credit card rather than paying for it in cash that came from a cash advance with the same credit card.  The reason for this is because a cash advance will probably raise your credit card’s interest rate.

Charging only for rewards

If earning points is your motive in using your credit card frequently, think of the broader picture and how it could possibly affect your resources.  If you are always on time with your payments, then doing it might be even at your advantage.  Then again, if you are time and again behind with your credit card payments, you should get around this as much as possible and focus on getting your act together.

Maxing out

Reaching and going over the maximum limit on your credit card can also affect your credit score.  Also recognized as maxing out, this routine could also have imminent consequences to your financial state and may affect your future credit or loan requests.  Maxing out is part of the Credit Utilization criteria which is about 30 percent of the credit score.

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