Best Practices for Managing Your Credit Cards

credit card

If you want to improve your credit, the first step is to create the best possible practices for managing your credit cards and other debts. To maintain and manage your credit card debt, you should be disciplined and focused. Make sure not to spend using your credit cards when it is not necessary. Below are some tips to consider.

Be Vigilant against Fraud

Stay vigilant about where your credit card is spent. In doing so, you will prevent fraudulent activities on your card. Pay attention to all receipts when you go to the store so that the amount on the receipt matches the amount on your credit card statement. If you are using your credit card online, be sure that the website is tightly secured. When you use your card at the gas pumps, it is best to pay for the gas inside the store rather than at the pump.

Credit Freeze

If you find that you are overspending on a specific credit card, it may be time to freeze the credit card. You should always freeze your card if you have any inclining of identity theft. In fact, it would be ideal to have an identity theft plan in place so that once your card is fraudulently used; the identity theft organization or financial institution will notify you right away and close your accounts for you to prevent theft.

Credit Report

At least once each year, be sure to order copies of your credit report from all three major credit bureaus, Experian, Equifax and TransUnion. With a copy of your credit report in hand, you will be able to see what is on your credit, whether there are any errors or not. You will be able to see your FICO score and make plans to improve it, if it is not in the right financial shape. Don’t wait until you are looking for a loan before doing this. You want to make sure that the credit card companies are correctly reporting the payments that you have made. Additionally, you will be able to see if there are any fraudulent activities.

Financial Responsibility

Don’t believe the myth that if your credit card has a high balance that you pay in a timely manner will improve your credit scores. In fact, this is not true. When you have high balances on your credit card, it only impedes you from getting certain loans. Creditors look at high balances as financial irresponsibility on your part. Use your credit card wisely and try not to overuse it on large purchases.

Pay Down Your Debt

Try paying off the smaller credit card debts first before tackling the cards with the highest balances. When you finally free up those funds used to pay down the smaller debts, you can then pay on the higher balances. You can also try paying more than the minimum balance so that you can pay them off sooner. If your credit card debt gets too overwhelming, you may want to consider debt consolidation to make it easier for you.

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