Credit Card Tips and Tricks

Financer.com gives you the tips you need to use credit cards wisely. Check out all of our credit card tips and tricks and learn more today!

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    • ABOC Platinum MasterCard Credit Card
    • $150 sign up bonus
    • 0% introductory interest offer

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    Please note that loan amounts, interest rates and other loan terms may vary according to your state and credit profile.

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    Find out how to use credit cards to your advantage.

    Getting a credit card is easy as long as you have a steady income. But getting the right credit card can take a little research. The fastest way to do this is to use our online Credit Card Calculator Tool to explore your options. Look for a card that offers you the following:

    • Low fees and interest rates
    • A fees-free initial signup period
    • No transaction fees
    • A points structure that you will actually benefit from

     

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    Credit Cards

    Why Discover Credit Cards with Financer.com

    At Financer.com we want to offer you financial solutions that will improve your financial future.

    Because of this, we look for credit cards that are most advantageous for general consumers when it comes to staying out of debt. Please take a look at our offers above and compare to see which offer is the best fit for you.

    How Credit Cards Play a Key Role in Financial Success

    Credit cards play a central role in all commerce. They are convenient substitutes for cash or check. A credit card is not only easier to carry than cash, but it is also safer because of fraud protection if your card gets lost or stolen. That’s something you can’t say about cash once it’s gone, it’s gone for good.

    A credit card can sometimes seem like free money, so it’s best to take some time to learn how to use it wisely, so you don’t fall into a debt trap.

    How Do Credit Cards Affect Your Credit Score?

    The average American carries four credit cards. However, this doesn’t mean that four credit cards are ideal.

    In fact, you might be shocked to learn that you technically need to have 21 lines of credit open to hit the perfect 850 FICO score.

    FICO® Scores Explained:

    FICO® ScoreRatingLending Opportunities
    300-579BadLoan applicants may struggle to get credit without a deposit. It can be difficult to be approved for credit with this rating.
    580-669FairApplicants may still struggle to get optimal lending rates and may still be rejected by certain lenders.
    670-739GoodMost lenders will provide credit to those with good lending however they may offer average lending fees.
    740-799Very GoodMost applicants may receive better than average lending rates.
    800-850ExcellentLess than 22% of Americans have excellent credit. Those with credit scores at this level are considered optimal applicants.

    In many cases, opening a new credit card can actually boost your current FICO score overall, some more than others.

    For example, you might have a low 600 right now but only have one credit card with $2,000 of credit. By opening a second card with an $8,000 limit on it, you might see your score shoot up by 80+ points on your FICO reports.

    There are many reasons for this, but basically, if you can show creditors that you can successfully manage large lines of credit, they consider you trustworthy. This behavior is viewed as a positive to other lenders who are willing to now work with you more because you display a healthy relationship with managing money.

    The Risks of Having a Credit Card

    There is always a risk when opening up new credit cards. If you overextend yourself and are unable to pay down your new credit limits, you may find yourself in a problematic debt cycle. A debt cycle where you are unable to pay your bills will be detrimental to your credit score.

    Any new credit card applications will cause a hard inquiry, which might negatively impact your credit score by 1-4 points. However, for the general population, the upside HEAVILY outweighs the downside.

    Approval means access to more credit, which in turn means a higher credit score overall. Typically people don’t notice too much of a credit score hit if they are applying for less than 1 new card every four months.

    • If you do notice a large hit to your credit score, you can generally wait about three months, and your credit score should recover overall if there are no other outside influences.

    Sometimes a significant dip in your score can be caused by too many new credit applications. Credit bureaus see too many applications as high risk and assume your creditworthiness is low.

    How to Use Your Credit Card

    Credit cards are so convenient because they are accepted virtually everywhere and don’t require hitting the ATM or carrying around cash. Just swipe your card or insert the chip in the card reader, and you’re on your way. But this swipe-and-go process can also lead you down a dark path of interest-bearing debt.

    Using Your Credit Cards Responsibly

    Credit cards can be amazing when you use them correctly. They can earn you free vacations and cash back options, but they can also open a pit of debt that can throw your financial situation for a loop. Here’s how to use them responsibly:

    • Spend within your means. Banks will occasionally call and offer higher lending amounts based on your income and credit card payment history. Make sure you are still leaving within your means even if you have a higher limit.
    • Never buy anything with a credit card that you do not have the cash to pay for.
    • Compare credit card offers often and focus on those with o% interest and reward points. Once you have opened an account, you don’t have to keep it.
    • Always pay your credit card in full when you receive your statement

    How a Credit Card Can Benefit You

    1. Convenience: With a credit card in your wallet, you rarely ever need cash or an ATM.
    2. Efficient record keeping: Easy expense monitoring and monthly budgeting through monthly statements.
    3. Instant cash: You can get quick cash advances when you need them, instead of applying for personal loans.
    4. Purchase protection: Credit cards often offer extended warranties on items you purchase.
    5. Balance surfing: You can quickly transfer your high-interest balance to a lower-interest card.
    6. Perks: Credit cardholders often earn reward points for using their credit cards, which they can redeem on travel, cash back and more.

    What to Consider Before Getting a Credit Card

    A credit card can be useful and destructive, so before you compare credit card offers, ask yourself these questions:

    • Can you limit use to just your daily expenses?
    • Are you committed to paying your credit card off each month to avoid interest charges?
    • If it’s a variable-rate card, can you afford the constant interest rate fluctuations?
    • What credit limit do you need? Use the calculator at Financer.com to compare 1 lenders limits.

    What You Should Know About Credit Cards Rates, Fees and Penalties

    Card issuers often find subtle ways to take money from you. Balance transfers and cash advances, while attractive upfront, include fees. Some companies even charge a yearly fee just for having the card.

    These fees are part of what allows credit card companies to offer these types of deals. Make sure you weigh out all your options before taking advantage of these and other offers.

    You also need to take penalties into consideration when shopping for a credit card. Late on your payment? There’s a penalty. Go over your limit? There’s another penalty. Each credit card has different penalties, so make sure to review these on the off chance you run into one.

    How to Find The Best Credit Card Rates

    Credit card rates can vary greatly between issuers, and the only way to find the best one for you is to shop around. But don’t search at random. Instead, write down a list of what you need in a credit card and put them in order of importance.

    This will help you whittle down the massive list of available credit cards to just a few that offer the best benefits for your situation and help you learn how to compare credit cards.

    Here are some of the rates to consider when shopping for a credit card:

    • Promotional interest rate
    • Fixed interest rate
    • Foreign transaction rates
    • Balance transfer rates

    How Can You Lower the Interest Rate on Your Card?

    Since you agreed to the credit card terms, you may have a hard time getting the issuing bank to reduce the interest, but it’s not impossible. Here are a few tips to help drop that interest rate:

    • Call your lender and ask for a lower rate.
    • Search for new-customer deals for your card and request that rate.
    • If all else fails, sign up for a new card with a lower rate and transfer the balance.

    Always remember that credit cards are like any other financial service: Everything is negotiable. Don’t be afraid to call your credit card company and ask them to lower your interest or waive an annual fee.

    How long does it take to get a credit card?

    Most credit card applications are fast and can be done online. The acceptance process can take up to two weeks from application to receiving your card in the mail.

    How old do I have to be to get a credit card?

    You have to be at least 18 years of age to hold a credit card account in your name. 

    How many credit cards should I have?

    Some experts say you should have 2 – 3 credit cards. However, this all depends on your debt to income ratio and the limit on each card. You should be able to build a strong credit score with 3 or fewer cards as long as you are keeping the balances low, paying your other bills on time and managing your debt ratio efficiently. 

    The worst the company can say is “no.” But if you have a steady payment history and have been a customer for a few years, you may be surprised at what you can ask for and receive.

    Author Financer.com

    Insightful articles, Industry news, Independent price comparisons

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    Last Updated: September 27, 2020