4 Ways to manage your credit with responsibility and dedication

Jul 17, 2009 | | Posted in Credit Improve

I don’t know how many credit cards you carry and I don’t know, on the average, what the number is among all Americans. Some survey says Americans carry more than five at a time. That’s a lot. I carry two – MasterCard and American Express. I use Amex for gas and other travel expenses and MC for other purchases.

Most people don’t need advice on getting a credit card since applications show up in the mail so frequently. Anyone can sign up easily for a credit card, but managing credit takes responsibility and dedication. Having fiscal responsibility when it comes to credit will pay dividends later in life.

1. Pay off the balance every month by the due date
   This is the most important part of the whole credit business. Use credit cards to your advantage, for your own livelihood. If you don’t pay off the balance every month, you are filling the card issuers’ already swollen bellies. Beat them at their own game. They are giving you at least 3 weeks grace period. That means you rent money for free for that length of time. Can you rent a U-Haul for free for 3 weeks? You bet your sweet ass, NO.
2. Request your card issuer for better interest rate on a regular basis
   Having said the first part, this does not make sense to talk about. But if, once in a great while, you cannot pay the full amount by the due date, ask the card issuer for better interest rate. Hopefully, if you follow the first point with responsibility and dedication, it will not be necessary.

   Even if you miss paying the full amount in a month and if, let’s say, the interest is 24%, that comes out to be 2% a month. Just pay in full the following month. If you are being responsible, don’t buy anything on the card for the second month, otherwise you would be piling up more money on top of the previous one.

3. Use only one or at the most two credit cards
   I say this because identity theft is at an all time high. The more credit cards you use or carry, the more chances you would give the schmucks of the world – don’t. For your one or two cards, check with your credit card company about their security measures to make sure you are getting their full coverage, and if you aren’t, then see how you can be placed under their protection plan.

   If you don’t pay off your balance in full, then a low-rate card would be right for you. If you do pay off your balance, then a rewards card or airline miles card is a nice perk. Also, remember to carry at least one card from a major credit card company such as VISA or MasterCard because some businesses will only take one or the other.

4. Always watch your credit limit
   I personally like to have as much and as high a limit that I possibly can get. But if you are not careful and get tempted to spend more than your limit, then I don’t have to tell you the consequences – the exuberant interest rate that some companies charge. You don’t wanna mess with that.

In a Nutshell
Take advantage of the grace period. Pay off the balance in full every month by the due date. Don’t use more than one or two cards. If you have more than two, don’t tear them before you close the account with the issuer. And most of all, just be responsible and dedicated in your financial dealings.

Information contained herein is general in nature, and is provided for informational and educational purposes only. Past performance is no guarantee of future results. Talk to your financial adviser.

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Shafi enjoys writing articles on a variety of subjects, paying off debt - at present he is debt free - giving to charities, likes dark coffee, and helping people succeed in their finances and careers. Please Contact Shafi to write for this blog. He also owns How to create your first website.