We bring you credit card management tips to help you improve your FICO score as its highly important to understand the importance of managing your credit and using your mind to maintain your basic financial well being.
CREDIT CARD MANAGEMENT TIPS
Using your own credit card with proper wealth management is very important and as we bring you these management tips we are sure to help you secure a good financial status with free of mental stress and anxiety.
Yes we know that you are very excited to get a credit card and buy new stuff for yourself and your loved ones but using a credit card is just like using debt for momentary benefits which have adverse effects on your financial well being as you have to pay your credit card bill on time and failing to do so effects your score and eliminates your normal financial health.
So we recommend you that you should use your credit card with care and understand how to manage your credit card so here are some amazing tips for you to manage your credit card use so that it never affects your financial health and you are able to maintain a good FICO score.
AFTER COLLEGE, HAVE A MAXIMUM OF ONLY ONE CREDIT CARD
It is highly confusing for the financial advisor to understand why people have more than one credit card. Is one not enough to buy all the stuff they need? Do they want to get points from different airlines? Do they want that one-time 5% discount from their favorite retailer?
There are so many small, short-term incentives to have multiple credit cards. Remember that the benefits are small and short term. It’s not worth the potential long-term debt to succumb to the promotions of the credit card companies.
Some people believe credit cards are status symbols (see the person who has five credit cards, and they’re all Platinum level). I don’t get it: Since when is having more debt something to aspire to?
Be proud you have only one credit card. Having one credit card makes it easy to keep track of your debt (which you won’t have if you follow the principles in this book). Better yet, fore go a credit card and just use a debit card.
A debit card will do everything a credit card does, except one thing: It won’t get you in debt!
DEVELOP AND MAINTAIN A GOOD CREDIT RATING
A good credit rating is very essential for a number of financial areas that affect your financial health, including these: Securing home loans, auto loans, and other types of loans.
Getting the most favorable interest rate, which will save you hundreds of thousands of dollars in your financial lifetime.
Renting an apartment; landlords look at this for the ability to pay. Getting a job; employers use the rating to see if you will be a reliable employee. Getting a good credit rating is very simple. Pay your credit bills on time, all the time.
This includes mortgage, rent, utilities, service bills, and, of course, credit cards. Believe it or not, even your one late payment can easily affect your credit rating. Your payment history is the major component in developing your credit rating .
Don’t apply for multiple credit cards. Applications for credit cards often are listed on credit reports as “inquiries.” Too many “inquiries” will cause the banking lenders to believe that you are taking on too much debt and thus are a high risk for getting into non payment zone.
Having many credit cards with multiple balances shows credit companies you are bad at managing your money. Thus, it will be difficult to get future credit. You’ve heard the expression “I’ve maxed out on my credit card.”
Definitely don’t do this. Lenders look unfavourably on people who use most of the available credit on their credit cards. To be safe, you should try to use up to only 35% of your available credit. It’s time now for me to get on my soapbox regarding the relationship between good credit and character.
Having a very high and good credit rating is not only a good financial imperative but also a very moral one. It reflects on your mindset and personal character. It boggles our mind how people can turn their backs on bills they personally owe.
These people clearly show a lack of good character. But then as their must be reasons and there are always so never over use the debt and credit card money to have healthy financial life.
Have you ever lent great amount of money to a friend who hasn’t literally paid you back? How did you feel when your are not paid back? What did you think of that friend of yours? What if not paying you back meant that you couldn’t pay your own bills? How would you feel then?
So please understand as the one who not pays you makes you feel bad its same with the banks as they give you credit card to make money not to loose money so either you should not use a credit card or you should maintain a good credit rating by paying your credit bills on time.
MAINTAIN A GOOD FICO SCORE
What is a FICO score?
A FICO score is a credit score that lenders (and landlords) use to determine your basic and normal future ability to pay bills. It is a basic and normal mathematical equation that looks at the multiple pieces of data available from your credit report.
The scores go up to 850 points. If you have a score of basic score of 700 or higher, then you are in good shape. A FICO score consists of five categories:
1. Payment history (35%)—Paying on time is the criterion. Missing payments hurts you here.
2. Debt (30%)—How much debt do you have? Too many credit card accounts will hurt you here.
3 .Duration of your credit history (15%)— How long have you had debt? Your youth hurts you here, but you can’t do anything about that!
4. Amount of new credit (10%)— You don’t want to have a lot of new credit
5.Types of credit you have (10%)— Good versus bad credit ratings. A home mortgage is far better than the highly unsecured loan (a loan that isn’t backed up by real property).
When you first start out, you need to establish a strong and good credit history so you have a good FICO score.
If you continue to maintain good credit rating, you will easily save yourself hundreds of thousands of dollars in the wrongful mortgage interest alone.
These are some basic credit card management tips to maintain your good financial health and live a happy life.
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