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Three Tips for Using Credit Cards Wisely

Credit can be a wonderful thing. How else could you afford to buy a car, buy a home, pay for college, or some other big-ticket item?
Credit Cards

That’s where credit and credit cards come in.

How you use a credit card for smaller purchases, helps determine whether the bigger items are within reach. Proving that you can handle the small stuff on a credit card will show financial institutions that you are ready for the big stuff. This doesn’t happen overnight. It takes time to build credit and to master the art of credit card use. Here are three simple tips to help keep credit cards and their balances in line with your financial goals.

1. Stick with one primary card.

If you have department store cards and one or more of the major bank cards (like Visa, Master Card, Discover), use the department store card only when they’re offering a money-saving reason to use their card (like 20% off). Department store cards typically have high interest rates— so if you don’t pay them off immediately, using that card to get a low sales price may cost you more than the 20% you saved.

 Use your primary card to pay for larger purchases that will take a little longer to pay off or for emergencies that pop up.  And keep it simple—stick with one primary card instead of multiple cards with small balances. It may seem manageable when you owe a lot of companies a little bit of money, but when you add the balances up it can be scary and confusing when the bills come and there are different due dates.

Remember that all cards are not created equal. Shop carefully when choosing a major credit card to be sure you get the best terms. Credit unions usually offer the lowest interest rates on credit cards and lower fees than traditional banks. Baltimore County Employees Federal Credit Union offers a VISA Platinum card with rates as low as 8.90% APR* and no annual fee. Credit lines range from $500 to $25,000. Plus, all cardholders can take advantage of the Rewards Program where earned points can be redeemed for a variety of rewards. Apply easily online or contact a Loan Counselor at 410 828-4730 or 800-234-4730.  

2. Pay on time.

The best way to prove to creditors that you can handle credit is to make  your payments on time, every time, event if it’s only the minimum. This is very important to keep your credit history positive. If you have a few extra dollars and want to pay down your card balances, a common technique is to choose the card with the highest interest rate and pay more than the minimum. You can find the current interest rate on your monthly statement—credit card companies are required by law to disclose this information on your monthly statement.

3. Review your statements

Once a month you can review your statement and you’re spending habits! Review the statement to make sure what you’ve purchased is there and nothing more. Contact the credit card company immediately if you see a charge on your statement that you have NOT made. Keep your receipts – they’re important when something is wrong on your statement!

These simple tips can make credit cards work for you instead of you working for your credit cards. It’s not as hard as you think – try it!

*Subject to credit approval. Check for qualifying details. APR= Annual Percentage Rate.

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