Do you have Credit Cards?

There are a lot of things you should know before you swipe your credit cards. Many people don’t really know how credit cards work, they think you apply for a card, you swipe the card and you pay the bill…end of story. While that is how it works, there is a little more to it that everyone using a credit card really should be aware of.

Did you know that it can actually hurt your credit if you have a credit card, but you don’t use it? That’s right, not using a credit card can actually hurt you, so be sure to use it at least once every six months.

Now, some may think…I don’t want to use my credit cards that often, I’ll just cancel them.

That’s fine, however that can hurt you as well. I know, crazy, right? You see, when you cancel that card you are decreasing the ratio of credit available to you, which can decrease your credit score. A closed account can decrease the average age of your history as well and that’s a big part of your score. If you really do not like the card, but find another card that you think you will like better you can swap the cards out, however you don’t want to get in the habit of always opening and closing cards.

Another thing you should know is that if you are offered a special promotion, such as 0% Interest, be sure to make your payments ON TIME every single month. If you are late even once, the interest kicks in—from the time you got the card.

One of the most important things you should know is that maxing out your cards is VERY bad. This makes your credit ratio increase, therefore making it look like you don’t have a lot of credit available to use. Banks want to see that you have credit and aren’t using it all, especially when you go to make big purchases for homes and automobiles and so forth.

My best advice (I am not a professional) is to limit the number of cards you apply for (a few—up to 5, in my opinion) will not hurt, however too many might. Rotate the usage of cards, do not max those cards out and make your payments on time every single month.

Be wise with your credit cards.

Happy Shopping!