7 Credit Card Facts -Use or NOT Credit Cards
Know that credit cards are representation of real cash, which you spend now and pay later. Consider the true cost of using a credit card paying minimum payments. A $50 dinner charged on a card with an interest rate of 22 percent can cost $2,500 paid over 20 years
Before you even make that first swipe on your purchases, you must know these credit card facts which can help you maximize the benefits of having your own credit card:
Credit Card Fact #1 When you open a new credit card account, you are making an impact on your credit score, reducing 5 points from it with each new card. Even if you won’t have it activated, each time you receive a new card in the mail, it will reflect on your credit score.
Credit Card Fact #2 Opt out from the mailing list in your local credit bureau so your name will not be sold to credit card issuers. You can do this by calling 1-888-5-Opt-Out.
Credit Card Fact #3 Reward cards are not free and only a few credit card companies issue it to their clients at zero cost.
Credit Card Fact #4 Paying your bills on time will increase your credit score and makes you avoid large credit card outstanding balances which is bigger than 25% of your maximum credit limit ( considered as red flag by banks or lenders ).
Credit Card Fact #5 Don’t fall into the minimum payment trap and dig yourself out before it’s too late. Paying your balance in full allows you an interest-free loan each month.
Credit Card Fact #6 Although debit cards can also be used for your purchases, know that they don’t offer the same type of protection that credit card gives in cases of product defects and returns.
Credit Card Fact #7 Beware of credit card skip-a-payment plans and universal default. Nonpayment won’t be reported to credit bureaus, but your outstanding balance will still continue accruing finance charges. If your credit card company has a universal default feature, it shall allow your lender to increase APRs or interest rates if you have late payment history with another lender.
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