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- A credit card can be one of the best tools to help you build credit and improve your credit score—if you use it correctly! Keep reading to learn how to make the most of your credit card and help boost your credit score.
The importance of building good credit
If you’re in your 20s or 30s, it’s likely that you have no idea what good credit is, but believe us when we say that all aspects of your life will be easier if you have good financial records—particularly your credit score. With a good score, car and housing loans are more affordable and leases for apartments are easier to get. Your insurance rates will be lower and you won’t need to pay as much to borrow money from other institutions.
Different types of cards to get you started
A secured credit card is one of several types of cards that you can use to help establish or repair your credit history. These cards require you to deposit money in an account that acts as collateral for purchases. This makes them more secure than other types of cards because there’s no chance you’ll miss payments if you run out of money in your account.
Dos and don’ts for newbies
It might be tempting to use your new plastic for every expense imaginable, but don’t make that mistake: If you use up more than 30% of your available credit, it will negatively impact your credit.
What should I know about rewards cards?
Rewards cards are tempting, but they can come with high interest rates and fees. Before you sign up for a rewards card, ask yourself: Is it right for your financial situation? Will you pay off your balance in full each month to avoid interest charges? If so, rewards cards may be worth it. But if not, they may cost you more than they’re worth.
Do I need an annual fee or rewards card?
When choosing a credit card, you’ll want to look at your spending habits, as well as what perks each type of card offers. For example, if you travel frequently, an annual fee or rewards card might be ideal—these types of cards often come with perks like free checked bags, companion tickets or priority boarding.
What are balance transfer cards, really?
Many people know balance transfer cards as those that offer low rates to move balances from other credit cards, but they have many different names. No matter what they’re called, they all have one thing in common: They’re designed to help you pay down debt and save money on interest.
Managing your credit responsibly will ensure a bright future
Use your new credit card for everyday expenses like gas, groceries and clothing. Keep up with these purchases by setting them to auto-pay so you’re never late. Monitor your budget to make sure you don’t spend beyond your means, and pay off each purchase in full at month’s end to avoid interest charges. All of these habits will boost your personal score over time. For more details visit - https://www.policyplanner.com/