Credit Card Debt Management

It is your right to use your credit card however you see fit. There is nobody who will be able to tell you what to do. Not even your credit card company has a say of what you buy and how much you spend; as long as you don’t go over your limit. Of course, this does not mean that you should be reckless with the decisions that you make. The way that you use your credit card is very important.

You probably fit into one of the three categories below. They are based on how often and what types of purchases you make with your credit card:

1. Small purchases. Using your credit card for small purchases, such as gas and groceries, is something that many people do. The problem with this is that small purchases can add up quickly if you are not careful. Make sure you keep track of what you are buying.

2. Big purchases. Do you only use your credit card to make large purchases such as car repairs, big ticket electronics, etc? If you are this type you probably buy everything else with cash.

3. Only for emergencies. Many are well aware of the dangers of credit cards so they only use their plastic for absolute emergencies. For this reason, their credit card may sit dormant for months or maybe even years on end.

Again, you do not have to listen to anybody else. You can use your credit card however you want. That being said, you definitely fit into one of the groups above. Or at the very least, you are a mix of more than one category. Knowing how you use your credit card can make it easier to stay financially safe.

Applying for a credit card does not mean that you have to be stressed and worried for days on end. When you know what you are doing this becomes easier. Before we go any further, the most important thing to remember is that applying for a credit card is a big step. You should never choose just any card because you want to get “something.” The credit card you decide on should be the one that is best for you.

Here are three tips to use when applying for a credit card:

1. The internet is where it’s at! You can find information on every possible credit card if you search online. Find one you like and you can apply for it on the spot. How easy is that?

2. Have an idea of what is most important to you. Is it most important that you receive a credit card with a low interest rate? Or maybe you are willing to pay more in finance charges for a better rewards program? Set your priorities so you can shop for and find the right credit card.

3. Don’t get scared. Some people are excited to apply for a credit card until they soak up all the information that is available. There is nothing wrong with wanting to make the right decision. But there is something wrong with collecting information and letting it scare you off.

These tips should make it easier for you to apply for a credit card. By starting on the internet with an idea of what you are looking for it becomes simple to find and apply for the card that will do you the most good. As long as you don’t get scared you will eventually receive your credit card and be happy with your decision. 

There are times to close a credit card and times when you should avoid doing so. It is important that you leave open certain cards, while thinking about closing others. Here are three types of credit cards that you do not want to close:

1. Any credit card with a balance. When you close a card with a balance your credit report will show that it is maxed out due to the fact that your available credit will be zero dollars. In turn, your credit score will drop.

2. Your one and only credit card. Even though they can be dangerous, there is nothing wrong with having at least one card with available credit.  You don’t want to close down the only card that you have. Not only is this good for some purchases and emergencies, but it will do your credit score some good as well.

3. Your oldest credit card. Believe it or not, older credit card accounts are better than new ones. When you get rid of your oldest credit card you are shortening your history. Once again, this can have a negative impact on your score. You may not see an immediate change, but over time a drop in points could definitely happen.

Are you thinking about closing one of the types of credit cards listed above? If so, you should think twice. It is often times tempting to close an account because it will stop you from using the card. But before you do this you want to make sure you are not jeopardizing your credit score.