Americans have over $1 trillion in credit card debt. Some people allow the allure of credit cards to lead them down a dangerous financial path. While credit cards are a great financial tool to have, they will need to be used with care.
The last thing anyone wants is to wake up one day and realize they are deep in credit card debt. This is why finding and implementing smart credit card strategies is vital. Ignoring the need for restraint when it comes to credit card spending is a recipe for disaster.
The following are some of the things you should consider when trying to use and manage credit cards wisely.
Setting Up Balance Alerts Is a Smart Move
If you are like most people, you live a very busy life. In some instances, your lack of time can lead to bad spending habits developing. Some people let the convenience of pulling out a credit card to pay for daily expenses lead to big financial problems.
The only way to avoid letting your credit card debt get out of control is by setting up balance alerts. Most credit card companies allow their customers to set up alerts that tell them when they have reached a certain balance threshold. Receiving this message will allow you to pull back the reins on your spending.
There are also services that will alert you when your credit card utilization score has increased. When receiving this alert, you need to work on paying down your balances. The higher your credit card utilization score is, the harder it will be to get approved for loans.
Embracing the Power of Spending Analysis Tools
For most people, online banking is a piece of technology they simply can’t live without. Many credit card companies offer their client’s online dashboards. These dashboards generally feature a spending analysis tool.
With this tool, you can see just how much you are spending on your credit card. This tool will also give you a breakdown of what categories this spending falls into. If you see that you are spending a lot of money on restaurants and fast food, cooking at home may be a better option.
Regardless of where your credit card dollars are going, you should always look for ways to reduce spending. The less money you put on your credit cards, the better off you will ultimately be.
The Power of Mid-Cycle Payments
Did you realize that your credit card company sends a report to the three major credit reporting bureaus on a monthly basis? This report gives these reporting bureaus an idea of what your credit card utilization ratio is.
If you are looking for a way to keep this ratio lower, making mid-cycle payments is a good idea. The reports sent over to these bureaus may not always reflect the latest payment you have made. This is why making a payment twice a month may be a good idea.
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Moving Your Due Date Can Be Beneficial
One of the worst things you can do in regards to your credit score is missing a credit card payment. If you don’t have the money to meet your minimum on the existing due date, contact your credit card company to change it.
Most credit card providers will have no problem helping an existing customer with this problem. Changing the due date to later in the month will give you more time to pay your minimum.
Before you call in to change your date, take the time to review your current pay situation. If you get paid consistently around a certain time of the month, then logically you will want to schedule your payments for this time. Doing this can help you avoid missing payments and damaging your credit as a result.
Take Advantage of Credit Card Rewards
Some people fail to realize just how many perks their credit card has to offer. Most credit card companies offer tons of rewards when purchases are made in a certain establishment. Before selecting a credit card, take the time to review the rewards they offer.
If you use credit cards for gas or dining purchases, finding a card that can offer rewards on these types of purchases is a must. By being smart about the types of credit cards you get, you can maximize the number of rewards you get with ease.
Taking the time to look at the reviews a particular credit card has received is also a good idea. With this information, you can easily narrow down the selection at your disposal. Rushing through this important process may lead to problems in the future.
Pay Attention to APR Promotions
If you are in the market for a new credit card, there are a few things you need to focus on. The main thing you need to find out about a credit card is what type of APR they offer.
There are a number of credit card suppliers who will offer a 0% APR as a way to entice consumers. Before you jump on one of these offers, figure out how long the 0% APR lasts and what the rate will be after this period ends. If you are planning on making a big credit card purchase right away, then a 0% APR is crucial.
Applying These Credit Card Strategies
Now that you are familiar with various credit card strategies, it is time to put them to work. Taking the information you have learned and using it to avoid massive debt is important.
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