It’s hard to imagine getting through life without a credit card or two. Credit cards are a basic fact of everyday life. That’s why being a smart user of credit cards are a key element of staying on the right track. Here are the rules for being a smart user of credit cards.
Know what the card will cost you. Credit card debt is basically short-term, unsecured debt, its very expensive debt. Know what the rate of interest is on a card before running up an unpaid balance.
Know what the grace
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Our mailboxes are swamped with offers for low cost credit card with rates of 6% or lower against 15% and more for the average card. Sign the dotted line, and your unpaid balance is transferred to the new card at a far lower rate. Let’s say you shift a $1,500 balance on a credit card carrying a 19.8% interest rate to a card offering a 5.9% rate for the first year. Your savings over that year will
come to over $200.
Just don’t abandon your present card for something that looks good on the surface
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keep in mind that recent late payments and collections within two years have a 24.5% impact on your score.
There are five factors that determine your credit score.
FACTOR #1: Account Utilization Rate (30% of Your FICO Calculation)
30% of your credit score calculation is based on keeping the balances on your revolving and installment accounts low, if possible
30% of the account’s credit limit. This is critical! You could potentially see a great increase in your credit score in only
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