6 Things Everyone Should Know About Credit Cards

| March 31, 2014

Credit cards undoubtedly have their good points and their bad points so the best thing anyone can do if they are thinking about signing up for one is to educate themselves on exactly how they work and the best ways to use one safely. The following outlines several important and useful tips which you should be aware of beforehand.

They should be used sparingly: The most important thing to remember about a credit card is that it is not a substitute for cash. Everything charged onto a card must be paid for eventually and so a card should only be used when you know you can afford to pay the bill by the end of the month. Setting up a direct debit to pay off the full amount on your credit card bill every month will ensure you won’t miss the payments.

They aren’t a debt solution: You should never use a credit card to try and pay off debt from another source as this money will still have to be paid back, meaning the cycle begins all over again and you simply fall further and further into financial trouble. Every time you use a card you are essentially taking out a small loan and borrowing money is never a safe solution to debt problems.

There are several kinds of card: There is no one credit card that is right for everyone. They come with all sorts of different interest rates, perks and repayment schedules. There are also business ones and personal ones but regardless of whether you opt for apply online credit cards or you head into your local bank and have them talk you through your options in person, you should still always research what is out there on the market to make sure you get the best deal and that it is a card that works for you and your individual needs.

You can pay more than the minimum repayment: When you take out a card, you will be given a minimum monthly repayment that must be met if you want to avoid hefty penalty charges but that doesn’t mean you have to stick exclusively to that figure. If you have cash available to pay back a larger chunk of your debt then it is wise to do so as the quicker you can pay back everything you owe, the better your credit rating will be and this makes it much easier to take out loans and secure mortgages, etc. in the future.

Banks are businesses: A bank needs to be able to make money and so they wouldn’t offer people credit cards if there weren’t ways for them to exploit money from their customers through them. This is why you must always read the small print of any deals before you agree to make sure there aren’t any unwanted catches or excessive extra charges. There are also often loopholes that mean they don’t have to offer people the deals they advertise, so always be certain you know exactly what you are agreeing to.

You have rights: As a consumer, you are protected in several ways. If you believe you have been unfairly treated by your credit card provider through the likes of false or disproportionate charges then you have the right to complain and request a refund. In many cases, people are successful if only they have the courage to ask, so ensure you exercise your rights as a consumer.

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Category: Credit Cards

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