The most common are the credit cards which are produced by three major companies – American Express, Visa and MasterCard. They are distributed on the market by numerous banks and specialized credit institutions.
Each of the lenders aspires to attract debtors, proposing different “decoys”. This is refund and bonus points, and miles of air travels. Different limits of loan amounts, different rates of loans, different amounts of amercements for infringement of rules are hidden behind these “decoys”.
The main rule – is to pay the debt in full and on a monthly basis. According to the Federal Reserve, from all holders of credit cards 40 percent of debtors violate the discipline all the time.
You need to set an exact date and time when you pay the accumulated liabilities for the month. Delay even for a day can lead to the forfeit of 30 or more dollars. If you delayed two or three times, the creditor would enhance the charge for the credit. This, in turn, will lower your credit score and, having found out about it, other creditors of the cards that you acquired would begin to raise their rates. You will step on the road leading your credit score down.
That is why limit the quantity of your credit cards. Experts suppose that they should be no more than six. The more cards in hand, the greater the risk of lowering your credit score is. But if you close several of your cards at once, it will alert the lenders and also move your score down.
This is one of instances showing that the use of credit cards is not easy.
Read attentively everything that is written in small print. Know the amount of the rate exactly, set by the creditor at the time of sale of credit card, as well as the length of the grace period, beyond which (in case of failure to pay), your rate will grow harshly and the size of the credit limit will decrease.
Do not hesitate to bargain with the lender. If your credit score is 700 and more, the lender probably will meet you and will not raise interest rate even if you are late in paying the debt.
Not very long ago loans were affordable to many people and they didn’t miss this chance. To be on the safe side they have to check their credit reports. This is very useful task but it may seem hard for somebody. It is possible to use credit monitoring service – they will help you to understand the reports clearly.