How to Manage a Credit Card
Having a credit card is a big responsibility, one that is sometimes difficult to manage without getting into financial trouble. Many people struggle to find the balance of using their credit cards without falling into serious debt. Taking control of how and when you use your credit card can help.
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Instructions
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Manage a Credit Card
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Carry a limited number of credit cards in your name and on your person. Having a credit card that you use for emergencies and one for which the balance can be paid off each month is all you really need. It's also wise to only carry your emergency credit card, bringing the other one with you only when you know you're going to use it. This should help you avoid temptation.
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Spend only what you can afford to pay back within a month or two. While making the monthly minimum payment on your credit card will keep you in good standing with the credit bureau, it will also keep you in debt. Any balance you leave on your account after the grace period is subject to finance charges which add up very quickly.
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Determine your own acceptable level of debt. The majority of financial institutions consider it reasonable to have a 25 percent debt-to-income ratio, which means the amount of money you owe is one-quarter of your annual income. Most people can only manage the payments on a 10 to 15-percent debt-to-income ratio .
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Advocate for your rights as a credit card holder by asking for lower interest rates or waivers of late payment fees. As long as your credit is in fairly good shape, most companies are willing to negotiate the details rather than lose a customer.
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Apply for credit cards that don't have an annual fee, as well as cards that offer rewards to members. Not only should you not have to pay for the privilege of membership, but you should get bonuses for it. Many cards now offer cash rewards or a certain number of frequent-flier miles for every dollar you spend.
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Read your monthly statements thoroughly to make sure all the charges were authorized for the correct amount and not subject to unexpected fees.
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Stop using your credit card if you're in over your head. At the very least, take a break from using it until the balance is paid down to a manageable level.
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Tips & Warnings
Keep a list of your credit card numbers and the companies' phone numbers in a safe and accessible place. If you have to report them stolen, you will be able to do so easily and quickly.
