![]() ![]() The best way to avoid costly interest payments is by paying your balance in full each month. The lower the balance that remains on your card each month, the less interest you’ll have to pay on the money you borrow. Plus, paying your credit card bills on time guarantees that you won’t incur any late fees. Paying bills on time ensures that you continue to build a positive payment history. Payment history is another important factor in how your FICO credit score is determined. Using less than 30% of your card’s credit limit is essential for maintaining a good credit score. It’s a key factor in how FICO determines your credit score. Use Less than 30% of your Credit LimitĬredit utilization, also called credit usage, is the ratio of your credit card balance to your credit limit. ![]() Keeping a low balance on your credit cards could make it easier to pay balances in full and reduce the amount of interest you have to pay each month. Be sure to follow these best practices to keep your finances and credit as healthy as you can. Below you’ll find some tips on how to use credit tactically to help stay out of debt. Whether you’re new to using credit cards or looking to improve your existing credit, credit cards are the most common tool people use to build and rebuild their credit. ![]() The Best Way to Use Credit Cards: Building Credit While there are plenty of reasons you might want to use your credit card, keep in mind that the convenience could come at a cost – when used irresponsibly, credit cards can put you in debt, much faster than you might expect. You’re freshly equipped with a powerful tool that could help you build credit, earn rewards, and make major purchases with ease. Getting approved for a new credit card is an exciting moment. ![]()
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