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7 Things to Remember about Credit Cards

by Francine Huff

About 144 million Americans have at least one general-purpose credit card, and the chances are pretty good that you have more than one card in your wallet. Using those credit cards wisely can help you avoid a lot of financial aggravation. Here are seven important things to remember about credit card use.

  1. Credit cards can help build your credit history. By paying credit card bills on time, maintaining a low debt-to-limit ratio, and not opening too many credit lines you can improve your credit score. Paying credit card bills late or charging up to the limit can hurt your credit score.
  2. Your credit could take a hit if you make too many purchases at establishments that lead creditors to view you as high risk, such as at casinos, thrift stores, or marriage counselors. It may not be fair for credit card companies to judge you based on purchasing history, but they do.
  3. Relying on plastic for too many purchases can put you deep into credit card debt. Credit cards should not be a substitute for a lack of income. If your paycheck isn't covering all your bills, it's time to examine your spending patterns to see where you can cut back.
  4. You can decline credit limit increases offered by card issuers. Just because the economy is limping along doesn't mean some people aren't receiving more credit. Feel free to decline any limit increases offered by credit card companies to avoid the temptation to spend.
  5. Always open credit card statements and other mailings as soon as you receive them. This allows you to see the due date for paying your bill, as well as any changes to the credit card terms.
  6. You can negotiate for better credit card rates. Even with many credit card companies hiking interest rates on many customers' accounts, you may be able to wheel and deal to keep your rate down. But negotiating probably won't do much good if you have a poor payment history or are delinquent on accounts.
  7. Credit card companies can raise your interest rate automatically if you are late with payments on other accounts. They can also increase your rate if you appear to have too much debt.

Having credit cards is a huge responsibility. Learn to manage credit wisely and make sure you understand all the terms and conditions of any credit card you carry.

Published 09/16/10 (Modified 07/09/14)

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