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Free credit cards tips and advice on credit card usage.
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Tip 1: Try keeping credit card balances below 50% of available credit.
Your credit score loves when balance on each of your credit card account is less than 50% of available credit
limit for that account! If you stick with this rule, you will be richly rewarded with higher credit score.
Higher score in turn means better deals on the next credit card, loan or mortgage.
On the other hand, if you got 0% to 6% APR on a new credit card or balance transfer offer from existing card,
of course fill this account up with balances transferred from higher APR cards! Just make sure to take into consideration
balance transfer fee and don't go over the credit card limit.
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Tip 2: Increase your credit score before applying for a new card.
A month or more before applying for a new credit card, you should try to increase your credit score to get a better deal.
There are two steps in this process. Step one: use money you saved to pay off part of your credit card debt. You should try to get your
balances to below 50% of available credit line on EACH account. Step two: try to reduce the number of credit cards
with balances: pay off credit cards with small balances completely (but don't cancel them!).
This should boost your credit score and in about a month you should be able to get a better credit card or loan than
you would otherwise.
Check your credit score before attempting this to make sure it's not bad. You could get a free credit report ones a year
from EACH of three major credit agencies here.
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Tip 3: Use online alerts on your credit cards accounts.
Life is crazy. Everyone is very busy. It's hard to keep up with and remember everything that needs to be done.
That is why you might forget to pay that credit card bill on time. This misfortune goes into your credit
history and lowers your credit score. Fortunately, there are ways to deal with this:
1. If it happens, call credit card company immediately and ask very nicely if they could take it away
for such a good and loyal customer as you. Both times when I was late it worked for me.
2. Pay bill or schedule your bill payment online as soon as it comes in. This is what I always do and it doesn't (it can't!) fail since I started doing it.
3. If you are confident to always have enough cash in your bank account, schedule automatic bill payments. I do it for electricity, phone and gas bills and it's 3 things less I have to remember each month. Thank God for small favors!
4. Set up email alerts in your account for when - a. new bill comes in
- b. it's 7 days until due date
- c. payment is posted on your account
- d. you are close to your credit limit
- e. purchase of $100 or more is made on your card
These alerts will remind you when it's time to pay and you should never miss a payment again.
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Tip 4: Get credit card with rewards you could use.
Credit card companies offer many reward credit cards that give you cash back, miles or points.
Depending on the type of rewards you got with your card, you could later redeemed these rewards for cash,
travel, discounts on products and services. As an example, I have an American Express credit card that gave me 30,000
points just as a sign up bonus. I could redeem these points for thousands of items, like, for example, 8GB iPod Nano
for 29,800 points. I also have Amazon.com credit card from Chase, that gives me 3 points for every dollar spent on
Amazon.com website. 2,500 points gets me $25 voucher to use on Amazon.com.
It's important to only get rewards that you could actually use. If you almost never fly, "air miles" rewards will be
of no use to you. And if you are not comfortable shopping online then online shopping vouchers will have little
value to you. Cash rewards are the safest bet since everyone could use some cash.
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Tip 5: Use credit cards for a cheap loan. But with caution.
Credit card companies will often offer 0% APR for anywhere from 3 to 12 months on credit card convenience
checks that you could deposit into your bank account. The usual fee for this transaction is 3% of the amount
used. If you are in need of a loan, this is a cheap and convenient option.
Some cards even offer 0% APR with no transaction fee (!), so essentially you are getting money for free! Sweet!
Unfortunately, since credit crunch begun, these offers have become increasingly rare.
I used these checks a few times and it worked great for me. A word of caution: it's easy to fall into
the trap of cheap money. You get a loan, spend the money and then end up not being able to repay what you owe.
Bad things will start happening then. So use credit card loan only when you are confident that loan will be repaid.
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