The most common are the credit cards which are produced by three major companies – American Express, Visa and MasterCard. They are distributed on the market by numerous banks and specialized credit institutions.
Each of the creditors seeks to attract borrowers, offering a variety of “baits”. This is refund and bonus points, and miles of air travels. Various limits of credit amounts, different interests of credits, different amounts of fines for violations of rules hide for these “lures”.
The main rule – is to pay the debt in full and on a monthly basis. According to the Federal Reserve, from all holders of credit cards 40 percent of debtors violate the discipline all the time.
You must set an exact date and time when you pay the accumulated debt for the month. Delay even for a day faces a fine of 30 or more dollars. If you were late with payment of two or three times, the lender would increase the fee for the loan. This, in turn, will lower your credit score and, having learned about it, other creditors of the cards that you have would begin to raise their interest rates. You will step on the road leading your credit score down.
Therefore, limit the number of your credit cards. Experts believe that they should be no more than six. The more cards in hand, the greater the risk of reduction of your credit score. But if you close a few of your cards at once, it will alert the creditors and also move your score down.
This is one of examples showing that the use of credit cards is not easy.
Read carefully everything that is written in small print. Know the size of the rate accurately, set by the lender at the time of sale of credit card, as well as the duration of the grace period, beyond which (in case of non-payment of debt), your percentage will grow dramatically and the value of the credit limit will decrease.
Do not hesitate to bargain with the lender. If your credit score is 700 and more, the lender probably will meet you and will not raise interest rate even if you are late in paying the debt.
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