Aimed at helping folks build solid credit history and use credit wisely, the tips offered from Take Charge America will help anyone make better use of their credit cards and improve their credit standing.
Good credit is vital for securing loans, including mortgages and auto loans, being approved for rental housing, getting the best credit cards, and scoring low interest rates on all types of lines of credit.
Here are six of Take Charge America’s credit tips:
- Don’t have too many credit cards. Applying for too many cards can have a negative effect on your credit score, as well as being a temptation to go into debt.
- Avoid fees. Making late payments and going over your credit limit are just two of the ways you might incur a fee. Besides that, you might be penalized with a higher interest rate if you pay late or exceed your limit. Paying late on a regular basis, or missing payments, could also result in a negative report to credit bureaus, lowering your credit score.
- Pay your whole balance each month. Instead of only making the minimum payment due, pay off the entire balance due on your card each month. This way, you’ll never incur interest on your purchases and end up paying more than you should.
- Never get cash from your credit card. A cash advance from an ATM may seem like an appealing option when you’re in a pinch, but it’s never a good idea. Cash advances are charged high interest rates and fees, and interest starts accruing right away, with no grace period.
- Never close an old account. Length of credit history counts for about 15% of your credit score, so the longer you have a card open, the better. Leave old accounts open and keep them active by using them once in a while. You’ll see the difference in your credit score over time.
- If your card has a high annual fee, consider breaking the above rule. The only time you might want to consider closing an account is if it has a very high annual fee. Some annual fee credit cards come with perks that make them worth the fee, so consider whether this is the case for you.
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