Here is an article about Credit Card Dos and Don’ts:
Credit Card 101: Dos and Don’ts for Responsible Plastic Use
As digital payments gain popularity, credit cards remain an exceptionally convenient financial tool. However, how you manage your card can make the difference between building strong credit and sliding into debt. Here’s a guide to making wise choices with plastic.
The Do’s:
- Pay On Time: Setting up automatic payments or reminders helps you avoid late fees and keep your credit score healthy. Timely payments form a positive payment history – one of the major factors considered by credit rating agencies.
- Spend Less Than You Earn: Limit your spending to what you can afford to pay in full each month. This lets you avoid interest charges and keep your utilization low, which is key for a good credit score.
- Stay Within Credit Limits: Maxing out your available credit can hurt your score. Aim to use no more than 30% of your limit per card. Some credit scores factor that percentage into their calculations.
The Don’ts:
- Carry Big Balances: Rolling over large amounts month-to-month means paying interest on those amounts, eroding your progress. Credit cards typically charge 15% to 20% APR. Pay off as much as you can afford each month.
- Ignore Fees and Charges: Know the penalties and fees associated with every card you own. These costs can quickly add up through time, hurting your overall financial performance.
- Apply for Multiple Cards Impulsively: Each new application triggers a hard credit pull, lowering your average account age and negatively impacting your credit. Focus on maintaining a well-managed existing card when possible.
By following these fundamental pointers and using credit wisely, your cards can serve as valuable financial tools that help you achieve long-term freedom and security instead of trapping you in a debt cycle. With discipline and responsible management, plastic can be your path to financial empowerment.
I hope this helps! Let me know if you have any other questions.