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11 Tips for Managing Your Credit Better
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Whether you're just discovering the world of credit or you're trying to wrap
your arms around your debt, it pays to be fiscally fit. Good credit can open many doors for you; bad credit will slam them shut quickly.
If you deal with your credit carefully, you'll be able to live more comfortably and manage your bills better, even in an emergency. Here are 11 ways to help get a handle on your credit and the plastic that comes with it.
1. Pay on time. Aside from triggering a blemish on your credit report, a late payment could lead to a late fee. Some companies also increase your interest rate, even if you're only a day late.
2. Pay more than the minimum due each month. Pay off your plastic in full every month when you can. If you carry a balance, it takes even longer to whittle it down when you only pay the minimum due.
3. Spend much less than your credit limit. Your credit score can be affected, and creditors get nervous when you're constantly on the verge of maxing out your accounts.
4. Transfer your card balances. Look at the interest rates you're paying on your accounts, especially the high ones that you rarely use. Some credit cards have a low-interest or 0% introductory rates for transfers, which you can use to slow down or stop the growth in your balances. This money-saving strategy makes it easier to pay down the amount due, assuming you can pay off all or most of it during the promotional low-rate period. Look for cards that don't carry a transfer fee that must also be repaid.
5. Ask an expert for help. If you're interested in checking your credit score or need assistance getting out of debt, financial institutions such as Central Sunbelt Federal Credit Union let you consult a certified counselor for free.
6. Avoid paying charge card and credit card bills with another card. You're just increasing the interest costs.
7. Create a budget. Compile a list of all bills and payments due each month. Calculate how much you need to earn each month to meet your financial goals. Don't forget to factor in irregular expenses such as birthday presents, vacations, annual fees and fuel costs.
8. Pay credit card bills twice a month. While it might sound a bit overzealous, consider that it's easier to make two smaller payments than one larger one. It also increases the distance between your credit limit and the amount you owe, which can improve your credit score.
9. Plan ahead for emergencies. Tuck away some extra money for unexpected medical bills, appliance replacements and auto repairs. This money should be easily accessible and not be drawn from credit cards.
10. Manage your finances and keep track of your money online with Web and mobile apps provided by lenders like Central Sunbelt. For example, many let you set up e-alerts, review pending transactions and pay bills at home or on the go from a smartphone.
11. Pay attention to how much you charge on your credit cards. While using plastic is convenient, it can make spending too easy at times. Keep a running tally of how much you spend to avoid going over budget or your credit limit.
With a little planning, using your credit and the plastic that comes with it can help you stretch your dollars a little further when needed. By keeping a watchful eye on how much you spend and where you spend it, you can make your lifestyle more comfortable and less stressful for the long run.