credit cards

6 Things You Should Know about Credit Cards for a Good Credit Rating

Credit Cards:  Unlock financial flexibility with your plastic currency! Learn how to maximize credit card uses to maintain a good credit standing.

While credit cards serve as a convenient payment method for purchases, they offer additional functionalities that can benefit you financially. Furthermore, there are proactive steps you can take to maintain a favorable credit profile when using these instruments judiciously.

credit cards

Defer payments with 0% interest

Rather than paying cash or thru a debit card,  you can choose to delay your payments using credit cards without incurring any interest charges.

Certain credit cards also provide flexible payment options through installment plans, such as Balance Conversion, Balance Transfer, and the popular 0% Installment scheme.

These arrangements allow you to spread out the payments over a period of time, potentially making it easier to manage your finances.

Earn perks and rewards

Credit cards often provide additional benefits beyond just the ability to make purchases on credit. These supplementary advantages can take various forms, such as reward points that can be redeemed for merchandise, travel miles, cash rebates, gift cards, complimentary items, or access to exclusive lounges and facilities.

The specific perks on offer tend to vary from one card issuer to another. To learn about the rewards associated with your particular credit card, you can inquire directly with the card provider or explore the details outlined on their website.

Build credit history

Utilizing a credit card in a prudent and responsible manner can serve as an effective means of building a favorable credit profile. By demonstrating a consistent pattern of making payments as agreed upon, you signal to financial institutions that you are a reliable borrower who honors their obligations.

This positive credit history can enhance your creditworthiness, increasing the likelihood that lenders will view you as a low-risk candidate for future loans and financing opportunities.

Ask for additional credit limit

If you have a good credit standing, you may ask your card issuer to increase your credit limit. This will give you more flexibility, especially for big-ticket items.

Never divulge your card’s One-time Password (OTP)

It spares you from fraud.  You should never give your OTP to any person for purchases or transactions that you did not make personally.  Should you find yourself a victim of credit card fraud, you can contest any unauthorized transactions on your credit card statement.

Pay the amount due for the month, not just the minimum

Paying the entire amount reflected on your credit card statement is ideal.  However, you may pay the minimum amount due, but it will only apply to the interest charges for the month and not on the principal.

Any unpaid balance that carries over to the next billing cycle will continue accruing interest charges. This cycle of accumulating interest or worst, penalties can cause your debt to escalate rapidly over time if left unchecked and may hurt your credit standing.

The negative record will have an adverse impact on your credit profile, potentially making it more challenging to obtain new credit cards or loans from other lenders in the future.

Understand how credit card works

Getting a credit card is  not necessarily synonymous  to going into debt. By understanding the mechanisms behind credit card debt, you can effectively control and strategize your monthly expenditures and repayments.

This knowledge empowers you to navigate the use of credit cards responsibly, potentially preventing the accrual of outstanding balances altogether,

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  1. Amber Myers says:

    Great advice. We have a credit card and make sure it is paid off every month so we’re not hit with any fees. We love the rewards cards!

  2. You really do need to understand the ins and outs of credit cards so you can use them responsibly and actually grow your credit. They are excellent financial tools!

  3. I have used 0% interest offers a few times in the past. They’re a great way to make larger purchases that you can’t avoid and pay only the cost over time.

    1. This is an advantage for us because you don’t have to pay the total purchase outright.

  4. This article provides valuable insights into managing credit cards and maintaining a good credit rating. The tips offered are practical and essential for anyone looking to build or maintain their financial health. It’s a helpful guide that simplifies the often complex world of credit management. Great job!

  5. tara pittman says:

    I love the rewards that I earn with credit cards. It is how I travel for free.

  6. Anita Fonte says:

    Yes, I agree with this advice. I would add there should be a course for students graduating from high school so they know about credit. I wish I had been taught when I was younger

    1. This sounds a good advice. I wish colleges offer this subject so we can avoid people from getting into trouble because of debt.

  7. Working on building my credit. These are great tips. Thanks so much!

  8. Rosey says:

    My grown daughter has just started using hers. I’ve given her the ups and downs and told her it’s best to pay off monthly if she can. I believe she’s going to be very responsible with it. Fingers (and toesies) crossed.

  9. LisaLisa says:

    This is such a great informative post. I have shared the same advice to my kids about getting credit cards, it’s really good to know the ends and outs before you apply for one.

  10. Nikki Wayne says:

    Sharing his kind of information is very helpful to gain knowledge about credit cards. These are all good sharing.

  11. This is very sound advice! I always make sure to pay on time as I know how it can affect your rating.

  12. These are some great credit card tips! I will be keeping them in mind!

  13. This is great advice; I am currently working on paying my credit care off. I use my for emergencies only, and I try to pay them off each month. But sometime it can be difficult.

  14. Building a good credit rating is crucial for securing loans and favorable interest rates. It also reflects financial responsibility and can open doors to better opportunities in the future- thank you for sharing these tips to help make that easier!

  15. Dana says:

    It is very important to read about how credit cards work and how to establish good credit. Many people don’t know about all of this. One thing my husband and I always do is pay off our credit card every month so it’s always down to zero.

  16. Melanie E says:

    You can get some great perks from using credit cards. It’s just one of the reasons why it’s good to have one.

  17. Understanding credit is such an important thing, as it has a large impact on our life. These are all good things to know about credit cards.

  18. I never really liked the idea of a credit card but got one for the points. These are great pointers for building credit.

  19. barbie ritzman says:

    I agree that paying the entire amount reflected on your credit card statement is ideal but not always realistic. However, it’s important not to let it take you too far.

  20. I love using credit cards for the reward points, lol 😛. It’s really important to use credit cards responsibly. My husband has stopped using it though! He prefers cash/debit cards to credit. Thanks for sharing these tips 🙂.

  21. It’s beneficial to maintain a good credit rating and to look around for the best credit card option based on what they can offer you.

  22. I try to avoid credit cards, but sometimes, I really need extra money. I`ll follow your tips about credit cards in the future.

  23. These are great tips regarding how to get good credit rating. My family and I try to pay off our credit card in full whenever possible. I also think that when a 0% interest fee is available I always opt for that option. Otherwise, it takes a lot longer to pay off debt when you are just paying the minimum.

  24. vidya says:

    We always ensure our credit card is paid off each month.. your post is sure to help young adults starting off to build their credit

  25. I do believe that credit cards are advantageous, one just has to be responsible in using them.

  26. Having a credit card is a great thing if you know how to use it properly. Those are some great tips to keep in mind and thanks for sharing.

  27. These are such great tips! We do earn perks and rewards from using our cards. You got to grab those freebies.

  28. When I first got my credit card, I did very well and kept it paid off. But as money flow slowed down life got in the way. I’ve been working to pay it off. I only use it for certain things and I pay that balance plus some each month.

  29. karen says:

    I didn’t know that increasing the credit limit would help the credit score! I will ask for an increase right away. THANK YOU SO MUCH.

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