A credit card is a fantastic financial tool to have access to, but you do need to make sure that you are managing it in the right way. It is easier than you might think to build up credit card debt and end up in serious financial trouble as a result. When you take out a credit card, you need to make sure that you fully understand the contract that you are signing so you don’t miss payments or end up digging yourself a hole that will be difficult to pull yourself out of.
Type of Card
There are many different types of credit card out there, so you need to pay close attention to the one that you choose to take out. Each will have its own benefits, so you need to know which are going to work best in your favour. What might be right for one person could be not quite right for another. Pay close attention to the abilities of each card so you can be certain that you are acquiring the right one for you.
One of the most popular types of credit card are rewards cards. As you make payments with them, you will earn points that can go to a wide range of rewards such as air miles. A slight variation of this is the cashback card, where you could be paid a percentage of what you spend back. This is popular with stores that offer their own credit cards, with cashback being earned on purchases made within the stores and then paid back as credit.
Another type of card worth looking into is the balance transfer credit card. If you are moving your balances onto one with a lower rate, or even a 0% rate, this is a useful card to have. It can be the right choice for people looking to consolidate their credit card debt in one place. These are also just some of the many types of credit cards available to you so make sure you do your research and find the right card for you!
Dates and Deadlines
When are the payments on your cards due? It is not a good idea to just apply for a card and then have no idea as to when you need to pay it off. This is an important date to have in your diary. Failing to make payments on time can play havoc with your credit score. Nowadays, all you often have to do to pay off your credit card is move money to the right part of an app so there really is no excuse for forgetting.
The relationship between two dates that you need to understand is credit card payment due date vs. closing date. While both are very important, you do need to note that they are vital for different reasons. By mastering the credit card payment due date vs. closing date, you will be able to take control of your finances in a much better way.
The closing date is the day that your billing cycle ends, and this is when you will be issued your statement. The payment due date is the final day you have to make your minimum payments and this usually comes in around 21 days after your statement is issued. Both are crucial dates, and so you need to be aware of when they fall as they could affect many aspects of your life. For example, depending on how they match up with your paydays and other outgoing payments like utility bills or rent, you might have to budget quite carefully to ensure that nothing is forgotten.
APR
APR, or annual percentage rate, is a form of interest that is charged to your borrowing and spending, and it might be one of the most important figures you have to deal with. It can affect both the cards that you choose to use and the ones that you make use of regularly. As part of your research to find the right type of card, you also need to make sure that you take a good look at the APR to ensure that you are not choosing the wrong one for you.
There are cards out there that offer 0% APR for a fixed period of time. These can be useful if you know that you will have to make some big purchases in the near future that you want to be able to manage effectively with your credit cards. There are also some cards out there that offer very high APRs, but they come with plenty of other benefits that help to balance this out.
Everything depends on your needs and what you want to get out of your card and your spending. Good APR rates can tend to be around 14-15% but it is not uncommon to see them as high as 24%. Remember, it all depends on what you want to get out of your card.A higher APR can actually work in your favour just as often as a lower one – you just need to make sure that the card as a whole is balanced. Also keep an eye on APR rates throughout the year – it might be a good idea to shop around for a new card if the rates climb a bit too high for you.
Find the Right Card for You
When it comes to managing your credit cards or any other part of your finances, knowledge will always be power. Put the time in to find out more about the types of cards available to you and then track down the right card. Remember, you don’t have to stay with your bank provider – there are plenty of other companies offering credit cards and they might be a better choice for you. A credit card is just one of the tools that a fiscally responsible person might use. It is important that you find one that works for you, your needs, and your lifestyle.
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