We shall examine how to use credit properly in this article. If you really need to build or rebuild your credit history, you must learn how to use your credit properly. Credit cards do not have established guidelines on how to use them. However, there are certain things you will do that will make your credit bad. This article has you in mind, we are set to put you through.
How to Use Credit Properly ; Start With your first Credit card
Did you just get your first credit card? Relax, do not be in a hurry to start spending, ease into it slowly. Even if you do, do not spend all in your card. You could just, make small charges on your credit card and pay the balance in full each month. The essence of a credit card isn’t to buy things you don’t have the cash for, but to help you start building a good credit history and instill good credit habits in you.
Moreover, you could start by using it for monthly subscriptions or another recurring bill, something around $15 or less, and pay it off each month. Let this be the only charge you make on your credit card for at least six months. It will enable you stay below your credit limit and pay your balance in full every month. This is one of the best proven way of building your credit score.
How to Use Credit Properly ; When Prepared Make Bigger Purchases
When you start paying your bills in full, you can start to use your credit card for slightly larger purchases. Continue to keep your purchases low, 30% of your credit limit or less. That means your balance should never go above $30 on a credit card with a limit of $100.
Always be prepaid to make a credit card payment soon after the purchase, even if the bill hasn’t arrived yet. If you consistently use your credit card the right way for months, your creditor might increase your credit limit and you to charge more on your card.
How to Use Credit Properly ; Be Self-Disciplined
You must train yourself to be responsible. Do not buy things on impulse. Each time you see an appealing advertisement, consider yourself carefully to know if you really need the products. Do not go shopping spree because your friends are doing so. Be self-disciplined. If you have to make purchases, buy only what you can afford to pay.
When you put money aside to pay your credit card bill, make sure you don’t spend it on something else before your credit card statement arrives. Send in your payment sooner if you think you’ll be tempted to spend your payment.
Moreover, do not start with many credit cards, start with one and keep your payments manageable. Several balances and due dates can cause confusing and lead you to debt and a damaged credit score.
Even though it is easy to have many credit cards, especially if card issuers keep sending credit card offers. You can stop the card offers so you won’t be tempted to open new credit cards. If you choose to opt-out temporarily while you get used to credit, you can opt-in later to survey better credit card deals.
Monitor Your Actions
Majority of cards give you access to see your account activity online. If your credit card gives you this option, sign up so you can monitor your credit card balance and pay your bill online. Yes! You can enroll for paperless billing statements, this will enable you to receive your statement online instead of regular mail. But if you need the physical credit card statement to remind you to make your credit card payment, do not enroll.
In Case you cannot Pay in Full, Carry out a plan ahead
An unforeseen occurrence may affect your payment for a while. During those months, make at least the minimum payment and don’t increase your credit card balance by making more credit card charges.
If you know you don’t have the money to pay your credit card balance, Put the card away. Ensure that you don’t use it until you can afford to pay new charges .
When you use your credit card responsibly, you get a good credit score for yourself.