Not everyone really needs to have a credit card, but it can be a useful thing to have in your wallet when you need some money and don’t have cash on hand or don’t get paid until tomorrow. A smartly used credit card can even do good things for your credit score.
If you completely understand the fact that credit cards are not free money and you do need to pay all of that money back, with interest, then you are definitely ready to have a credit card. For some people, though, it’s like potato chips; you can’t just get one. So, here are some things to keep in mind when it comes to having a credit card in your possession.
How Many Are Too Many?
When it comes to credit cards you need to consider how many you actually need, where to get them from, and which are the best options. If you want a card for emergencies, you want one with a Visa or Mastercard type logo on it, not just a store card. The first question is, can you afford to use multiple credit cards and keep them all paid off?
Second, consider the fact that having too many credit cards in your name can also hurt your credit score. And, when you have a good amount of money racked up on all of those cards will you still be able to make at least the minimum payments on them?
Safely Cancelling Them
You also need to know how to properly cancel a credit card, or why you might not even want to cancel them. Canceling a credit card in the wrong way can damage your credit score a good deal. You definitely want all of the cards to be paid off before you cancel any of them.
If the cards don’t have an annual fee you may just want to pull them from your wallet and put them in your fire safe, rather than canceling them. You never know when you may need them and that available credit could look good for your score.
How To Make Payments
Paying on your credit cards is one of the most important things when it comes to having a credit card. But how you pay matters. If you are only ever paying your minimum payments you will never pay your card off, which will mean you are continually paying more than what you intended for the items bought with your card.
Interest rates can be a pain. That’s why it is always important to pay more than just the minimum on what you owe each month. It’s even better to simply pay off your cards each month (if you have more cards than you can afford to do this on then you have too many).