They are those little pieces of plastic that we all love so much. Convenient and fast, credit cards are a staple of American finances. With all the ease of credit cards come a few problems like overspending and fraud. Luckily, there are a few simple things you can do to make sure you use your credit cards smartly and safely.
Credit Card Tips
Many experts will advise that any time you charge a payment to your credit cards that you should plan on paying off the complete balance when you get the bill. By using this strategy, you can avoid high interest rates and take advantage of the grace periods that credit cards offer. If you do this, you can actually borrow money for up to 30 days with no interest fees or penalties, kind of an interest free loan.
Credit card companies are fully aware of this strategy and they depend on the consumer not having enough self-discipline to pay their balances completely each month. To use these grace periods to your advantage, you first need to determine exactly how much money you can afford to pay on your credit cards per month. Once you have determined this number, do not spend more than it on your credit cards.
Unexpected emergencies are an unfortunate part of our lives and cause us to not always have full control over our finances. You might have self-discipline and pay the entire balance of your credit cards every month, but because of an unexpected financial crisis can cause you to fall on hard times. Do not fret, call your credit card company and find out what options you have available. They can work with you to extend your payments. If the financial drought is more long term, you may have to cultivate other options.
Department Store Credit Cards
Most department stores offer their own lines of credit in the form of department store credit cards. Department store credit cards have high interest rates and very strict repayment terms. The purpose of a line of credit with a department store is that you shop solely at that store.
Regardless of whether you have an outstanding balance with the department store or not, your credit report will still show that you have a line of credit for however much the department store has authorized you to use. When attempting to take out a mortgage or car loan, having too many open lines of credit can work against your chances of being approved for a loan that you really need; the balance that you owe on your multiple lines of credit makes no difference to banks or finance companies. To ensure that your credit report is not bombarded with open lines of credit and credit cards, experts say that carrying two different credit cards is most that any person should have.
When you have an abundance of credit cards or lines of credit, you also open yourself up to identity theft. If your credit report is constantly getting pulled for credit card offers and department store lines of credit then anyone could use your information to obtain several credit cards without raising any alarms.
Protecting Yourself from Credit Card Fraud
Credit card fraud can leave you feeling helpless and angry. Protect yourself from this miserable problem by taking a few extra cautionary steps. You should take your credit seriously since it will determine what interest rates you will be given on any major purchases, if you can receive other lines of credit and your ability to take out loans.
Make sure that you are being safe when purchasing items online. Do not make purchase from a site that looks like it might not be legitimate. Check to make sure that all companies you give your info to have been accredited. Review your credit card statements every month as well as your credit report at least once a year. Check both of these for any possible errors and make sure to resolve each one. Print all of your online receipts and keep them for your records.
Keep all restaurant receipts and make sure that you verify them on your statement; it is very easy for a waiter to change the amount of tip you’ve given. Do not respond to emails or calls that ask for your credit card information; no company will ask you for your information by phone or email.
Make sure your credit cards are signed, and try to invest in a paper shredder to get rid of important financial documents with personal information. This includes all pre-approved credit card applications you may receive, and any carbon copies you receive.
Make a list of all your credit cards and account numbers and their 800 numbers in case any cards are lost or stolen. In the event that your cards are stolen make sure to call within 24-48 hours so you will not be held responsible for the fraudulent charges. If you suspect that you are a victim of credit card fraud you should immediately cancel the card, identify the credit card company, file a report with the police department and place fraud alerts on the accounts.
Whatever you do, realize that credit card fraud could cause you some serious problems, so take necessary action to protect yourself.
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