Credit can be an enormously important tool and can help you with some of the biggest purchases that you will have to make in your life including cars, homes and even medical care. It is vitally important that you use your credit wisely and protect it well. Itâ€™s sort of a double edged sword also because most experts will tell you to use credit as little as possible.Â Read below to see 4 important Tips for handling your credit wisely and keeping your credit score looking good.
Tip 1) Building your credit. Right from the start when you get your 1st credit card your goal should be to use it sparingly and pay off at least the minimum every month but if you can at least 10% more. The fact is, you can build a solid credit history and credit score with a couple of well-handled cards but you can easily damage your credit if you spend more than you earn and fail to pay the cards on time.Â Also remember that having no credit history isnâ€™t great but having bad credit history is definitely worse.
Tip 2) Choose the right credit card.Â First, remember that you really only need 1 credit card and you should definitely not have more than 3.Â Store credit cards are generally the worst because they have the highest interest rate, and â€˜rewardâ€™ cards are usually not much better even if you might think they are. If you have a card with an annual fee dump it and find one that doesnâ€™t, especially if your credit score is high.
Tip 3) Sometimes not having a credit card is the better option, especially if you are prone to wild spending jags or have a spouse that is. (This could be a man or a woman.) Yes having a credit card is convenient but having a lousy credit score isnâ€™t and can hurt you long after the â€˜joyâ€™ of buying something has passed.
Tip 4) Paying off any balances on your credit card is extremely important and as fast as possible too. If you have a card with a high interest rate but you have a good history of paying on time you can always call the credit card company and ask them to lower your rate. Whatever you do pay it off as soon as you can and try not to use it at all until itâ€™s been paid.