By far
greatest invention banks have ever come up with came out in 20th century. Also new field of Credit Management was born with invention of credit card. It is most available out of any financial product out there. In fact more than 80% of U.S. households have at least one credit card. If you want to consider yourself as "Average" American then you have about 8 credit cards burning a hole in your wallet right now. To make sure that you don't get yourself in any trouble (again) try and follow these 10 Simple Steps for Credit Management. 1. Ignore bank's/lender's rule on what is an "acceptable" level of debt. Your debt-to-income ratio, as they like to call it, is how much debt you can carry to amount of money you bring make. Depending on how well you have managed your credit in past it can fluctuate quite a bit. The average is about 25%. The ideal number is of course ZERO but for starters work on getting it down to 10-15%.
2. Remember what a credit card is...A Credit Card. Just because they have waved their magic wand and sent you your "Pre-Approved" Card doesn't mean go out and use it. The bank does not know your situation or your lifestyle all they look at is number that you should be able to pay off using most of your "extra" money. They will keep you paying them for rest of your life if you let them. Which brings me to next point...
3. Don't pay just minimum balances, unless of course you like paying 400% or more in interest. A typical Credit Card debt of $4,500 would take you about 44 YEARS to pay off! And you would end up paying about $17,000 total by time you are done. When you stop and think about it, does that sound like a good deal to you?
4. Play Game- Remember that you are customer and "the customer" is always right. When it come to annual fees and higher interest rates ask for a lower rate. And if you slipped up and got a late fee ask to get it waived (make sure you promise never to do it again...well at least for six month) Remember that it is a lot more cost effective for them to keep a customer happy than it is for them to go get another one. Your $29-$35 late fee does not come close to money they will have to spend to get a new one of you.
5. While you are playing game don't get blindsided by fees. The banks have come up with some very creative ways to make money at your expense. They have ones that everyone knows like over limit fee, late fee, and extra card fee. However, they also have less obvious fees like account transfer fee, and a fee for talking to a live person instead of a recording. Make sure you look at your statement and check out all charges. Some of them may surprise you.
