Managing your credit and credit card usage is a tricky thing. Credit cards can make your life easier or harder depending on how you use them. Credit card companies offer you great deals, low APRs, etc. and then bind you up with complex terms and conditions in the fine print.
That fine print is what gets most people. Credit card companies offer you great deals, knowing full well most people won?t even read the fine print or understand the minute details of the terms. They count on this so that as soon as you misstep, they can raise your interest rates and earn more money from you.
Of course, if you?re one of the more responsible credit card users, you?ve never missed a payment, or paid late, you keep a low balance on the credit card and you pay off your purchases each month, then you?re golden! Until you get that notice in the mail saying there?s a change in the APR across the board for all users. And suddenly all of your good behavior through the years still results in an 18.99% interest rate.
No matter how much you love your credit cards, remember, they are very sharp double-edged swords. Credit card companies are in the business of making money ? so anything they offer that sounds too good to be true probably is. Their goal is to maintain a sustainable profit ? and special offers are great for that.
If at all possible, just avoid credit cards all together. You?ll be a much happier, carefree individual. Of course, that?s not always a feasible lifestyle for everyone, especially since credit cards can help build your credit history in a positive way. If you are going to get a credit card, at least go about it the right way.
And as with any financial decision, step one is always research. Research your own credit history and score (which can affect the interest rates you?re offered) and sift through all the credit card offers you?ve received. Typically the thing to look for is a low APR, or zero APR to start and then a fair APR after 6-12 months.
Once you?ve found an offer that looks good to you, call the company and get more details, ask questions, etc. Especially if there is something in the terms and conditions you don?t understand. Be blunt and honest with the representative ? ask them straight out what mistakes you might make that you?d get penalized for with the credit card company. Their job is to provide you with all the info you need to make a decision, so take advantage of that.
Last but not least, try and keep your credit limit as low as possible. High limits lead to high temptations that might make you bite off more than you can chew in credit card purchases. If the company gives you a high limit, ask them to lower it to something reasonable. It?s much easier to avoid debt from credit cards in the first place than try to pay it back once the damage is done.