How to maintain good credit

It is very hard to avoid the pressure in our economy to spend beyond what we ought to do because of easy credit. It is time to take back the initiative and break free from the bondage of credit card debt.

Here are several important strategies which anyone can implement to keep from being a victim in this modern economy of plastic debt.

1. Always pay your statement on time.

Late payments not only trigger painful fees but they hurt your credit record which push up the interest rates you may pay in the future. A better method or tool to avoid this problem is to have automatic withdrawals of your monthly payment or at least be signed up with your checking account number so that you can do it manually. Then you are not at risk of a delay by the postal service.

2. Read carefully the introductory or teaser rates for new cards.

You must understand when the low interest period ends. Less than six months is not enough to make it worth the other costs and inconveniences of changing cards. Read the chart to find out about any account transfer fees, which often are more than the interest that you may be trying to avoid.

3. Don’t ignore your monthly statement for each active card.

You should be familiar with the interest rates and fees for each one because these costs are your responsibility. You have agreed to the terms even if you have not read the basic summary and it may be costing you much more than you realize.

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4. Eliminate idle cards and accounts.

You don’t need a large number of plastic “friends” in your purse or wallet. They add complexity to your life when you probably want to get better organized. They increase the risk of identity theft liabilities. Extra cards also increase the potential combined debt levels and this can lower your credit score.

5. Limit the kinds of items that you put on the card.

Stores know that consumers spend more than they expected to if the bill is paid with a credit card. Emotionally, we are a little more reckless with plastic than if the purchase is made with cash. So find a way to avoid buying things that you don’t need, like paying in cash or waiting a day or two after finding something you like. The impulse may pass very quickly and then you don’t have the interest on top of the price of that new shirt.

6. Begin to design a budget that works for your family.

Even if you are successful in fixing many of the mistakes that you have made in the past, you will be in trouble again soon if you don’t know where your money is going each month. The credit card company doesn’t care how much you can afford to spend. So you must consider how to best control your hard earned dollars and stop the bleeding that may be hurting your peace and contentment.