Sunday, June 13, 2010, AM | 2 Comments
We all maintain our vehicles with oil and filter change at regular intervals. In between, sometime when we must go out on a date with our vehicle, we treat it with a set of new tires, replace transmission gasket and fluid in the pan. We all know and do that. If we don’t, the car is gonna abandon us in the middle of the street, or worse in the middle of the highway. In short, we treat our vehicle with respect.
Credit card account should be maintained as well, more like on a monthly basis. Many have more than one vehicle, perhaps two per family. In the credit card world, majority of the folks have at least five cards including cards given out (free) by retail stores. It’s time to respect our finances in general and credit card in particular.
The problem I see is that anyone can sign up, and very easily I might add, for a credit card. However, managing and maintaining credit takes responsibility and dedication. Having fiscal responsibility will pay dividends later in life. The following guidelines to credit card maintenance is one step in the right direction:
Restrict yourself to no more than two credit cards
One important weapon in the card issuer arsenal is to entice you with discount if you apply for its retail card. Don’t let them follow you to your financial grave. Also, applying for new card is detrimental to your credit score. However, understanding and choosing the right card can make all the difference in your financial life.
Try to pay off monthly balances
Most credit give at least 3 weeks, some as much as 30 days, as grace period. If you think about it, that’s free money that you can use with no interest as long as you pay the full amount by the due date. That’s good and dandy for a lot of folks but most folks can’t pay it back even if the grace period is better than one month.
When this happens, interest is charged on the unpaid balance, which can compound quickly. If only the minimum payment is made which many folks do, then the full amount could take years to pay off, depending on the interest rate. So learn proper credit card maintenance, keep your spending in check and ensure that your monthly balances are paid off on time to avoid incurring fees.
Request better rates on a regular basis
You don’t get “nothing” if you don’t ask “nothing”. The good thing for consumers is that credit card business is extremely competitive. That means issuers don’t want to lose customers. Request a lower interest rate will produce results. If you find yourself unable to pay the balance in full one month, the lower rate will already be locked in to help with your credit card maintenance.
Keep the limit to what you need
Everything in life is limited especially in your financial life. So set your credit card limit. Sometimes, the card issuers will tend to raise your limit to entice you to spend more. Eventually, a time comes you may not be able to pay off the balance in full at the end of the month, resulting in high interest charges.
- You lose when you spend more unnecessarily
- They win when you spend more unnecessarily
You can never keep up with Mr. and Mrs. Jones. You never do. Contact your credit card company about lowering the limit.
It has been said by many experts that the best tool for maintaining a credit card is a pair of scissors. Unless you have developed some extreme habits that will definitely send you to your financial grave and you see that coming but have put your head in sand like an ostrich, getting rid of all your credit cards can never be a sound financial judgment on your part.
If you wanna continue living in the Western World, you need to build and maintain a good credit history. However, you need to have no more than two credit cards.
Always be aware of security measures
I have written extensively about financial security and identity theft on these pages. So refresh your little gray cells and be on the look out for scams, scums and schmucks.
In a Nutshell
Don’t use other humans’ common sense when it comes to credit cards. Using your own is always a sound idea. Don’t let the convenience of using credit card deceive you. At the register, swiping seems easy and fun especially in front of your friends that you don’t like in the first place. However, paying up later isn’t nearly as fun.
Make a deal with yourself. Save money in interest and increase your saving instead. Your kids will remember and love you and will pray for you once the time comes when you are “deleted” from the surface of the earth.Facebook.com/doable.finance
- Jun 13, 2010: You Maintain Car - Time To Maintain Credit Card Drugs on Me