Credit Cards Can Help You Get Out Of Debt
Your credit rating / credit score is based upon how you have dealt with credit previously. If you have always paid the full amount owing and never missed a payment then your credit score will be high. If you miss payments, been late paying, not paid in full each month then your credit score will be lower. If you're trying to re-build your credit or if you're young and just starting out, pay close attention the next time you receive a new card offer in the mail. When you're trying to build a positive credit history for yourself, using the right credit card makes sense. Making small purchases and then making your payments on time each month is a simple, reliable way to build an outstanding credit report.
What to Look For On a Credit Card Application
If the credit card application you receive appears to offer a low monthly interest rate, don't make a decision until you turn it over and closely examine the Disclosure Box. In it you'll find a more important measure of credit terms - the Annual Percentage Rate, or APR. By federal law, the Disclosure Box will also tell you whether or not the card has what is called a grace period - a number of days, usually 25, until your purchase starts to accrue finance charges. If a card has a reasonable grace period and you pay off your balance at the end of each billing cycle, you won't have to pay finance charges. It isn't difficult to find credit cards that offer these grace periods, so if the Disclosure Box doesn't declare one then throw the application in the trash and look for a better offer.
If you don't have any credit history at all, a credit card company won't want to give you a very high credit limit, but that's probably best when you're just starting out. You don't want to be tempted to go into serious debt with your very first credit card.
Calculate Your Monthly Finance Charges
Ideally you want to pay off your balance each month to avoid paying any finance charges, but when that isn't possible it's important to know the actual cost of the items you purchase. The annual percentage rate, divided by 12 months, gives you the periodic rate that will be applied to your outstanding balance each month. You can estimate what your monthly finance charge will be by multiplying the periodic rate times the outstanding balance. It may sound complicated at first, but taking the time to learn this simple equation can make a big difference in how you use your credit card.
When you're able to see how much you actually spend on an item that you don't pay off at the end of the month, it might help you to resist the temptation to over-use your card. An item that you want to buy might be on sale at the time you purchase it, but if you don't pay off your balance at the end of the month then those finance charges can dramatically increase the actual amount you'll end up paying.
Use Your Credit Card as a Tool
Credit cards are only one of the tools available to help you build a positive credit history. Making on-time payments for other forms of credit, such as rent and utilities, are also important. Depending on your situation, within 1-2 years your credit rating will be improved enough that you no longer need to use your card for new purchases to maintain your good credit. Use these tools wisely, and they'll help build your financial future!
Paul Forcey is the Webmaster for Agony Aunt Debt Advice.
MORE RESOURCES:
 BBC News | Former Credit Suisse broker arrested in US Swissinfo, Switzerland - A former Credit Suisse broker has been arrested for fraud and conspiracy over deceptive sales of subprime-related auction-rate debt in the United States. ... Former Credit Suisse broker charged with subprime-linked fraud in ... UPDATE 1-FBI arrests ex-Credit Suisse broker Bulgarian Wall Street broker indicted |
S&P cuts O'Charley's credit ratings CNNMoney.com - S&P on Thursday cut the company's corporate credit rating to "B+" from "BB-" and its senior secured credit facility rating to "BB" from "BB+. ... Cut north-west or bust Upstate NY water authority rated AA |
 CEP News | S&P upgrades Raytheon credit ratings 1 notch CNNMoney.com - S&P upgraded the company's long-term corporate credit rating to "A-" from "BBB+." The outlook is "Stable." The Waltham, Mass. ... S&P puts Fifth Third on credit watch Credit rating soars in District 300 Starbucks downgraded to 'BBB' on weakening credit metrics - S&P |
When the Bank Closes Your Credit Account Washington Post, United States - By Joan Goldwasser Q I received a notice from Capital One that it is closing my credit card account because of inactivity. If the company closes the account ... Capital One Spurned Mortgages For Credit Cards - CFO |
The Upcoming Technology of RFID For Contactless Access Control ... MarketWatch - This technology is now being rolled out in the UK and around the World for so called 'BioMetric passports' and credit cards because there are no physical ... |
Credit Crunch: The Sequel U.S. News & World Report, DC - And that certainly seemed to be the case in March when investment bank Bear Stearns became the highest-profile victim of the credit crisis. ... UPDATE 1-US banks' direct borrowing hits record in week UPDATE:Comml Bks Set Record For Avg Discount Window Borrowing The Market: What the Pros Are Saying |
Legg Mason's stock hit by Credit Suisse downgrade Reuters - Credit Suisse analyst Craig Siegenthaler downgraded Legg Mason, the No. 2 publicly traded US asset management company, to "underperform" from "neutral," ... After Credit Suisse downgrade, Legg shares fall Legg Mason leads financials lower Legg Mason shares slide after ratings downgrade |
 CBC.ca | Canada bank CEOs see more credit crisis uncertainty Reuters - By Lynne Olver CALGARY, Alberta, Sept 5 (Reuters) - Fallout from the US subprime mortgage crisis and subsequent credit crunch has left nagging regulatory ... Markets still rocky but underlying environment 'benign': Deutsche ... |
Credit Suisse appoints India investment banking MD Hindu Business Line, India - MUMBAI: Credit Suisse on Friday announced the appointment of Mr Pankaj Kalra as the Managing Director of its India investment banking department. ... Credit Suisse hires Merrill banker in India Credit Suisse appoints Pankaj Kalra, MD, investment banking Merrill Lynch Hires Dick Barrett and Mark Ellman to Strengthen ... |
UPDATE 2-Lehman credit spreads widen amid KDB speculation Reuters - Lehman's credit default swaps rose 20 basis points to 345 basis points, or $345000 per year for five years to insure $10 million in debt, from 325 basis ... Credit crunch: Small Korean bank in $6bn bid to rescue Lehman Southpaw: Blood now, pay later: banks get ready for bonus season Lehman nears rescue deal with KDB |
The Top 5 Secrets to Managing Your Credit Cards-So They Won't Manage You
You've probably never heard of Frank X. McNamara, but he revolutionized the way you shop on a daily basis.
10 Dirty Tricks Credit Card Companies Play
The credit card companies make billions each year in legitimate interest charges and fees, but are under constant pressure from the shareholders to increase their earnings. To make this extra money the credit card companies sometime adopt some dirty tricks to make this money.
Annual Credit Report and Free Annual Credit Report
Getting an annual credit report review has been the advice of many financial managers as they guided their customers to be aware of all information on credit reports. Would the idea of a free annual credit report be good news? Consumers are thrilled with the new federal mandate that demands the three major national credit bureaus offer a free annual credit report to anyone requesting copies of their personal credit reports.
Which Business Credit Cards with Reward are the Best?
Thinking of applying for a credit card with a reward program to help you and your business? Here is a brief guide to some of the best programs on the internet.The Platinum Business Credit Card with rewards from American Express is a great offer.
Credit Scoring: What You Dont Know Can Hurt You
You've probably heard the term credit scoring. You may have some idea that your credit score can have an effect on your life.
7 Consumer Credit Laws You Should Know if You are Trying to Repair Your Credit
There are seven consumer credit laws you should be aware when dealing with your credit.1.
Lower Your Credit Card Interest Rate Now!
With today's credit card companies, there are many opportunities to get your cards rate of 21% or more reduced. The higher the amount of interest your card charges will cost you more for a simple purchase and ultimately may take you years to pay off instead of months, should you make the minimum payment allowed.
Finding Reputable Credit Card Companies
You're interested in getting the best credit cards for your family's needs, but you don't want to be cheated. Or you're interested in small business credit cards, but you've heard that some of them aren't terribly secure.
Guide to Credit Terms
Listed below is a useful guide to credit card terms. It is a list of definitions of credit card terms that may or may not be familiar to you.
Check Your Credit Before Shopping For That Home Loan
Review Your Credit Score.Nearly every bank, credit union, and mortgage lender relies on a three digit score provided by one of the three major credit bureaus to help them make lending decisions.
Four Tips How Homeowners Can Rebuild Their Life After a Foreclosure
Let's face it, if you are facing the possibilities of losing your home due to a foreclosure and you think that you may never be able to purchase another home anytime soon. Keep reading.
Credit Report Disaster Through Mistaken Identity
I've got some very important info I want you to think very seriously about. I'm sure by now you've heard of Identity Theft,.
Dealing With A Collection Agency
Step I - Selecting A Collection AgencySelecting a credit collection agency is perhaps the most important and difficult task. Some factors you must consider while selecting a collection agency are:- Experience and professionals - Geographical presence - Expertise - Fees and charging model - Customer references - Collection Agency Services has covered this topic in depth through various free collections reports and articles on this site.
10 Ways To Protect Your Financial Identity Being Used For Someone Else's Shopping Spree
Someone impersonating you could be spending your hard-earned money.Impossible! Not really, check, loan, and identity fraud are a real problem.
Is it Safe to Use Online Car Finance?
Online car finance is convenient. You can apply over the net and shop around for a good deal from the comfort of your home.
Dont Fall For A Scheme When Trying To Rebuild Your Credit History
For people with a spotty credit history or bad credit, getting approved for a standard credit card can be difficult, if not impossible.There are a number of credit card options that are aimed specifically at people who have bad credit and are trying to rebuild or repair it.
Maximizing Credit Card Rewards
In their quest to get you to sign up for their credit card, banks and financial institutions are coming up with more and higher incentives to entice you. Frequent flyer miles gave way to gas miles which opened the door for cash rebates and reward points to be used at 'our fine member merchants'.
Are 0% Credit Cards Reaching Their End?
Are Credit Card companies starting to feel the pinch? We all know that the Credit Card companies make their money by charging us interest on the money we borrow. With all the 0% balance transfer offers that we have seen over the last few years its no wonder these companies are concerned they aren't making any money.
Beware of Bogus Credit Repair Companies!
So-called "credit repair" companies claim they can remove negative information from credit reports. Advertising as "Credit Advisors," "Credit Rating Correction Services" or "Credit Consultants," they trumpet variations on this message: "Turned down because of bad credit? We can help!" Many of these companies charge hundreds if not thousands of dollars for the promise to "clean up" bad credit reports.
Dont Fall for Credit Repair Scams
We've all seen the ads on television or in magazines, shouting, "Erase bad debt!" or "Remove negative entries from your credit report!" If you're a person suffering from a less-than-stellar credit rating, those headlines may seem like the answer to a prayer.The only problems is, those programs don't work, and to add insult to injury, you'll find yourself paying hefty fees to those companies, only to end up right where you started, or worse.