Many credit card companies target the groups of people they feel will be interested in their card. Department store cards focus on the avid shopper, Diners Club cards are geared towards those who eat out often, and major credit cards (Visa, MasterCard, American Express and Discover) are aimed at consumers who want to make their lives easier by not always having to carry around cash. Major credit card companies also have partnerships with a number of banks (as many bank customers have debit cards with a Visa or MasterCard logo), giving customers the option of paying for items with credit cards while still using their checking account.
If you’re thinking about getting credit cards, it is important to get all the information you can about the company issuing the credit cards. Be familiar with the policies of the companies, and be aware of any late fees or additional charges. Don’t hesitate to call the company you’re considering getting credit cards from and ask them as many questions as you need to. This shows that you are serious about maintaining good credit. It also shows credit card companies that you’re responsible and will most likely pay your bills on time. This will make you eligible not only for special offers from the credit card company, but also for major purchases in the future.
Also, be sure to stay within your line of credit. Each company that provides credit cards will offer you a line of credit (the amount of money you can spend on your credit cards) based mainly on your employment history and previous credit. If you can help it, always stay under your credit limit. If you have to use your credit cards for an emergency, be sure to pay the bills as soon as you can. And, when you receive your bill, pay the full amount instead of just the minimum payment, if you can. This reduces your interest rate and interest charges, as well as additional fees you may accrue from owning credit cards. It also looks really great on your credit report. It will save you from having to pay more at a later time. Be sure that you’re aware of your APR (annual percentage rate) as well. This factor could make your overall payments noticeably higher or lower, so choose credit cards with the lowest APR for your budget.
Make a definite plan for how you’ll use your credit cards. If you have more than one, it would be a good idea to use different credit cards for different functions. Make sure to only use the credit cards for what it is designated for — don’t use your ‘grocery’ card to by shoes, or your ‘shopping’ card to pay for car repairs. This will help you to keep up with your finances and organize your budget. You are less likely to overspend when you give each of your credit cards an ‘assignment.’ It would also be a good idea to have credit cards to use in case of an emergency if you can. Use these credit cards only when you absolutely have to (i.e. unexpected expenses, medical emergencies or automobile mishaps). These cards shouldn’t have too much of a balance on it, and should be easier for you to maintain.
Even though having credit cards (usually just one or two) takes a lot of responsibility and discipline, owning credit cards makes life much more convenient, and makes the things you need (and want) accessible. With careful planning and financial organization, having credit cards could be a positive step toward establishing a good line of credit for yourself, Companies will consider this when you’re looking to purchase a new car or home. So pay your credit cards consistently, and spend wisely.
By Tamiya King