5 credit card tips everyone should know
For a lot of us, our credit cards play an important part in our everyday spending. But like any other form of credit there are a few things to keep an eye on, including fees and interest.
So whether you’ve decided to pick up your first credit card or are in need of a quick refresher, here are five tips to ensure managing your plastic is fuss-free.
Tip #1 - Automate your repayments
If there’s one thing you don’t want to do with a credit card it’s forget the bill’s due date. Not only will you be slapped with an annoying late payment fee, but if you frequently miss repayments your credit score could also take a hit.
One simple way to always make your repayments on time and pay off your balance is to set up a direct debit. The good news is you can do this with all of your other bills as well, taking the stress out of remembering multiple due dates.
Tip #2 - Be smart about your purchases
Our next tip is for card holder’s who are serious about avoiding interest. As you might already know, credit cards typically come with either 44 or 55 interest-free days. This means that any purchases made within these days won’t incur any interest, so long as you pay your balance off in full by the due date.
So if you’ve got a large purchase coming up, it’s a good idea to try to make it at the start of your statement period rather than toward the end. By doing this, you’ll have sufficient time to pay the balance off without incurring any interest charges.
Tip #3 - Pay more than the minimum amount
Speaking of paying your balance off, try to pay more than the minimum amount each month to avoid mounting interest. This is especially important if you own or are thinking about picking up a rewards credit card, as the rates on these cards tend to be on the higher side.
Tip #4 - Don’t max out your credit card
Although this might seem like an obvious tip, it’s still worth remembering that just because you have access to a whole heap of credit it doesn’t mean you should use all of it. According to credit reporting company, Experian, you should only be using up to 30% of your card’s credit limit.
Keep in mind that while there’s no way to say if that is the perfect percentage, it’s not a bad idea to keep your spending to a minimum.
Tip # 5 - So no to ATM withdrawals
Aside from missing your bill’s due date, another big credit card no-no is using it to withdraw cash. This is because cash advance rates on credit cards are significantly higher than purchase rates and can soar as high as 29%. Plus once you make a withdrawal, you automatically lose your interest-free days and will start to be charged interest immediately.
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