department of credit research

So you’ve received a sparkling credit card with a sky-high limit. Not so fast! Before embarking on a huge shopping spree there are a few important things you should know in order to avoid a credit crisis in the future.

Maybe this new card is for “emergency use only.” If that’s the case, it is important to define what an “emergency” is. An emergency might be an exploding pipe flooding the basement. Other people might consider the Annual Shoe Blowout at the Super Shoe Warehouse to be an emergency. Regardless, decide the specific purpose of your card and stick to it.

You might have obtained this card to try to improve your credit rating and score. If you are young and planning to make a major purchase in the future, this is a smart idea. Make sure to use the card in a way that will help your efforts instead of hurting them.

You can maintain a healthy credit score by paying the full balance each month. Be sure to do it on time. Doing so will show that you’re a responsible borrower. You will also avoid having to pay high interest fees. Set a budget and stick with it. This will prevent you from accumulating debt rather which will hurt your credit rating. Charge only what you can comfortably pay off, without having to tap into your savings.

Some people feel the need to check their credit report and score on a monthly, weekly, or even daily basis. Although it’s wise to monitor your record to detect any fraudulent activity, make sure you do it responsibly. It is best to check through one of the three major credit bureaus. You can actually hurt your credit record if you repeatedly check through a credit lender. Therefore, you should avoid doing that unless you’re actively applying for credit.

A common credit mistake is using credit cards, instead of savings, to pay the bills on a routine basis. This mistake leads to hefty, long-term debt. Avoid it like the plague. Your purpose in maintaining a savings fund is to have a nest egg for the future, or something to fall back on during economic hardships.

Credit cards make shopping convenient no matter where you are. The internet has spawned a completely new global shopping market, making it easier than ever to find just about anything and have it sent directly to your home. Make sure the site you’re purchasing from is secure before using your card. This will help you avoid fraud, scams, and identity theft, which can cause permanent, irreparable damage to your credit.

Once you’ve learned how to use your credit card wisely, you’ll be able to maintain a good credit score and stay out of debt easily. Now you’re ready to get out there and start buying!

Tags: secured credit card
Filed under: secured credit card