Credit Facts
It is good to have a credit card. Many people use a credit for different purposes. Some like to use a credit card to improve their credit, some just want to purchase everything on a credit card, and some are aware that if they purchase on a credit the company insures the products they purchase. Different people, different needs, same credit situation. Let us look at a few credit facts.
Some credit card companies will be looking closely at the amount you have charged on your credit card and then will simply multiply this amount by the interest rate. Now if you have a card with a high interest rate, then you can imagine what is going to happen when the statement comes in.
While applying for a credit card it should be a good idea to check with the credit card company and ask them if the interest rate will be a variable rate or a fixed rate. I would suggest always go for a fixed rate as the company will not be able to change the rate of interest 2 months down the line. Imaging when you applied you got a rate of interest of 8% and in 2 months, it went up to 17%!
Your monthly interest is also listed as an Finance Charge on the Account. Therefore, the next time you are wondering what is the rate of interest that has been charged and if you see a finance charge, you know the percentage now.
It is a good idea not to have more than 2 credit cards. I suggest stick to 1 only and maintain it. Pay regularly.
Whatever you buy on credit, ensure that the amount should not be more than 20% of you net income else you could be in a difficult position at the end of the month.
Most of us pay the minimum due when we are short of cash in the month. Ensure that you always pay more than the minimum due amount on the statement. Best would be to pay the total bill amount.
Keep a track of the money you owe to the bank or the lenders. Call up and ask them on a regular basis.
Know what you are buying and have a good reason for buying it on credit. Ask yourself if you really need to buy it? How much will it cost you in the end?
Credit reports are free, so go ahead and request for your copy of the free report online or call your local toll free number.
