Credit card tips mentioned in this article

  1. There are lots of different types of cards to choose from.
  2. There’s no perfect number of credit cards you should have.
  3. You must understand your card’s interest rates.
  4. Comparing cards is vital.
  5. The contract is binding.
  6. You can pay in full…or not.
  7. You have rights.

How can you forge a positive and fruitful relationship with credit cards? By learning the basics before you apply for an account. Understanding the fundamentals — from knowing which types of credit cards exist to the legalities of usage — will help you charge wisely from the moment you receive that powerful piece of plastic.

1. There are lots of different types of cards to choose from.

There are several varieties of credit cards: general purpose cards can be used anywhere, while  private label retail cards can typically only be used at the issuing store or service station.

Most general purpose cards are unsecured meaning the issuer extends a credit line based mainly on your credit history.

 Secured Cards, conversely, are backed by funds you put in a deposit account that the creditor can claim if you default. Because creditors assume little risk with secured cards, qualification is relatively easy, so they are ideal for those with damaged or unestablished credit.

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Robert Manning, professor of consumer finance and director of the Center for Consumer Financial Services at the Rochester Institute of Technology, recommends asking the issuer if an unsecured card will be available once you build your credit history.

“Make sure they report to the credit bureaus, too,” he says. If they don’t, you won’t be building a history at all.

2. There’s no perfect number of credit cards you should have.

According to, the consumer division of the company that invented the FICO credit risk score, the average consumer has nine credit cards.

There is no perfect number of credit cards one “should” hold. A couple of general-purpose cards suit most consumers’ needs.

If you want a retail card, make sure it’s for a store you frequent often, and offers an incentive for using it as retail cards typically charge higher interest rates than general purpose cards.

3. You must understand your card’s interest rates.

Credit card interest rates can range dramatically — from zero percent limited-time balance transfer offers to as high as 30 percent.

Creditors use such factors as your credit scores income, assets, current debt load,  credit inquiries payment history and economic conditions to set your annual percentage rate (APR).

Who receives the best (lowest) rates? Consumers with positive and proven credit histories.

4. Comparing cards is vital.

Banks, credit unions, retailers, and credit card companies all issue credit cards. ( Visa and  Mastercards are companies that help process payments; they don’t issue cards.)

The best way to apply for an account, says Lita Epstein, author of “The Complete Idiot’s Guide to Improving Your Credit Score,” is to “locate the card with the best rates and terms by researching options online.”

This targeted search approach can protect your credit rating from too many unnecessary inquiries.

5. The contract is binding.

Read the agreement carefully, because once you sign, you form a legal contract and consent to the terms set by the issuer. These include:

  • Credit line/limit.
    The total amount you may charge, including interest and fees.
  • Annual percentage rate (APR).
    The interest charged on carried-over balances. It usually stipulates a higher rate for paying late, charging beyond your limit, balance transfers, and cash advances, too.
  • Interest calculation method.
    Most calculate interest charges by averaging the daily account balance, then multiplying that figure by the periodic rate (APR divided by the number of days in a year).
  • Fixed or variable APR.
     Fixed rate APRs have consistent interest rates.  Variable APRs are tied to an index (often the prime lending rate, which is set by the Federal Reserve) and thus fluctuates.
  • Grace period.
    The  grace period is the number of days (generally between 20 and 30) you have to pay in full before interest accrues.
  • Fees.
    Ordinary fees include those for cash advances, balance transfers, paying late, exceeding your credit limit, and sometimes an annual fee.
  • Avoid cards with nonstandard fees, which Manning lists as application charges, not using the card, calling the creditor if they don’t have an 800 number, online account management, and terminating the account.

Be aware that most creditors reserve the right to change any of these terms — so check your mail vigilantly for adjustment notices.

6. You can pay in full … or not.

Each time you charge, you borrow money.

However, because credit cards offer a revolving balance option, you aren’t required to pay the entire loan — as long as you make at least the minimum requested payment, you can carry the remainder over to the next month. Interest will be added to the balance.

Avoid paying just the  minimum payment though. “Your creditor may consider you to be high risk, and increase your interest rate accordingly,” warns Manning

7. You have rights.

 As a cardholder, you have a legal right to fair treatment.  The truth in lending act requires issuers explain all the terms of the contract in detail, in language the average adult can understand.

Problems with your bill?  The fair credit billing act  gives you the right to dispute and correct errors, and protects your credit rating during the process.

Ultimately, there is no secret to using credit cards wisely. If you get a low-fee account, always pay on time, and carry no debt from month to month, charging is free.

Even better, if your card has a good rewards program, you can even come out ahead by using them.

14 Helpful Tips For Maintaining A Good Credit Score

Written by

Chris Muller|

Modified date: May 20, 2019

Maintaining a good credit score is vital if you want to apply for loans or credit cards. Follow these 14 tips and you’re sure to stay in good standing.

There are plenty of things you can do to maintain the good credit score you’ve worked so hard to build, and one excellent reason why you should care: money.

A good credit score typically means lower interest rates, and that means more cash in the bank. It’ll also be easier for you to get loans and credit.

With that said, here are my top 14 tips for keeping up your credit score.

1. Treat all of your debts equally when it comes time to pay

Your credit score takes into account both revolving debt (credit cards) and trade line or installment debt (mortgages).

It doesn’t matter that your line of credit, for instance, has a lower interest rate, you shouldn’t prioritize other loans if it means neglecting that payment. Constantly having a balance on your credit cards can lower your score and hurt your chances for getting approved for loans or any other credit card accounts you may want to open.

2. Keep old credit cards open to maintain the longer history

There are a few reasons why keeping old cards open can benefit your credit score, and one is the length of your credit history, which accounts for 10 percent of your score.

This is especially important for older cards, because they give your credit report a longer record, and this’s good.

3. Consolidate cards to have fewer balances

Having a number of small balances spread out over several different cards may seem smart, but this approach can actually backfire if you overuse it.

Instead, John Ulzheimer of Credit Sesame says you’re better off paying these amounts down. “A good way to improve your credit score is to eliminate nuisance balances,” he says. This is because having multiple cards with balances can lower your score rather than boost it.

If you’re looking to pay off credit card debt quickly, consider a balance transfer card to consolidate all your monthly payments onto one card.

4. Make sure you pay every bill on time, every time

Your payment history accounts for 35 percent of your credit score. If you have trouble keeping your bills in order and staying organized with payments, set up electronic billing and payment reminders to stay on top of your bills.

If you aren’t good at keeping track of what’s due when, don’t worry, there’s an app for that.

If you’re terrible with being on time, you can set up auto payment plans through your bank or with your credit card to ensure that bills are paid for you, on time, every month.

5. Try not to rack up the balance on your credit cards

If you have one credit card with a $1,000 limit and have a $500 balance, your credit utilization ratio is 50 percent. Aim for 30 percent or lower.

The people with the best credit scores only use about 8 percent of their available credit.

6. Keep an eye on your credit report and make a stink about errors

Errors on your credit report are more common than you might think. Luckily, you can keep an eye on them by taking advantage of the free yearly credit reports you’re entitled to from TransUnion, Experian, and Equifax.

When you get the reports, go over them carefully to look for errors, and get on the horn right away to dispute ones you find.

7. Avoid applying for new credit whenever possible

New credit applications account for 10 percent of your score. Each time you apply for credit that prompts a hard inquiry into your report, your score will take a hit.

Unless it’s absolutely necessary, don’t apply for new credit cards or loans if you want to keep your score up.

8. Make payments in full when possible, and otherwise pay at least the minimum

There are at least two reasons why you should never just pay the minimum on your cards, and one is because this is a terrible way to pay off debts! Paying just the minimum means even small debts could be stretched out over years, and this means exorbitant interest fees.

However, if the minimum is all you can manage, make sure you pay at least that every month, otherwise you’ll have late or missed payments on your report for seven years.

9. Creditors are real people too, so contact them if you encounter problems

If anything should ever happen and you face financial troubles that could affect your ability to pay your bills, then call your creditors right away. Often, you’ll be able to arrange alternative payment solutions, negotiate a lower interest rate, or otherwise mitigate the situation.

10. Live within your credit means and don’t exceed your limit

According to Wells Fargo, a 20/10 rule is a good rule of thumb for credit. Don’t “let your credit card debt exceed more than 20 percent of your total yearly income after taxes. And each month, don’t have more than 10 percent of your monthly take-home pay in credit card payments.”

11. Chip away slowly to reduce your overall debt load

If you currently have debt of any kind, taking steps to eliminate it will gradually improve your credit score. Stop using your cardsmake a budget, and start paying down your high-interest cards first while maintaining minimum payments on all the other debts.

12. Get all your rate shopping done within a two-week period

To avoid having inquiries impact your score when you apply for a new loan, finish your rate shopping within two weeks because there’s a 30-day grace period during which inquiries won’t affect your score.

13. Consider using a credit monitoring service

Credit monitoring services like Credit Sesame watch your credit daily for unexpected changes. On top of alerting you to dips or increases in your score, it can also serve as an early warning sign of identity fraud.

14. Use credit boosting services

There are a couple of innovative ways of boosting your credit score, above and beyond the ordinary “pay on time” methods. On is Self Lender – a company that helps you take out a loan and pay it off each month. Whenever you make a payment, they’ll report the good behavior to the credit bureaus and your credit score and profile will likely improve.

Another is Experian Boost, which allows you to include your positive payment history for utility bills and cell phone bill payments to your credit score – payments which otherwise would not affect your score at all. Best of all – the service is completely free.


There are plenty of tips, tricks, and healthy habits you can use to maintain and even improve your credit score. Some of the best things you can do involve being consistent with payments, not overspending, and paying bills on time.

On top of that, other things you can do include avoiding applying for new credit, keeping an eye on your reports for errors, and taking steps to eliminate debt and lower your credit utilization.


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