Some people agree that using a credit card to pay for day-to-day purchases is a smart idea, if you have control over your spending habits. After all, credit is safe, convenient and rewarding. Plus, if you’re responsible, you’ll also be building a solid credit score with every swipe.
But are you really making the most of your plastic experience? Here are 5 credit card tips everyone should know:
- Balance alerts can help you keep your spending in check
Keeping a watch on how much you’re spending with your credit card is easier than ever before. Most issuers allow you to set up balance alerts so that you’ll receive a text and/or an email whenever your total spending hits a certain threshold that you’ve set.
Sign up for this service so that you’ll get a notice when your credit utilization ratio is approaching the 30% mark – this way, you’ll know to make a payment before you jeopardize your credit score.
- Spending analysis tools make sticking to your budget a cinch
One of the most underrated online banking features offered by most credit card issuers these days is the spending analysis tool. This allows you to see a breakdown of how much you’re spending with your card in different categories (restaurants, travel, general merchandise, etc.). You can usually choose to view this on a per-month basis or take a look at your spending patterns over time.
Be sure to look around for this tool the next time you log into your card’s online banking platform. It can provide some helpful insights into where you’re doing a good job sticking to your budget, and where you might need to cut back.
- Mid-cycle payments could improve your credit score
Every month, your credit card issuer sends a report about your account to the three major credit bureaus. Included on this report is your balance, which is used to calculate your credit utilization ratio.
However, this data isn’t necessarily sent over after you’ve made your monthly payment – it could be reported at any point in your billing cycle. If you tend to charge a lot to your card each month, getting into the habit of making a payment mid-cycle will keep your credit utilization ratio low. This, in turn, will help 30% of your credit score determined by amounts owed.
- Moving your due date could help you avoid missing a payment
Missing a credit card payment is bad news for your FICO credit score, since 35% of it is determined by your history with making on-time bill payments. If your credit card billing due date comes at an inconvenient time during the month, consider switching it. You can usually do this online or by placing a call to your issuer. This one simple move could go far toward preserving your good credit.
5. APR promotions could save you big bucks on interest
If you’ve gotten into some credit card debt or need to make a big purchase that you don’t have the cash to cover, capitalizing on a credit card APR promotion could be just the ticket. By picking a card that’s offering a long 0% rate on purchases or balance transfers, you can dodge the sky-high finance charges that would come with using your usual card.
Just watch out for balance transfer fees, and be sure to make your payments on time. If you don’t, your deal might get canceled and you could end up paying interest after all.
Source – Nerd Wallet Finance