Most Americans start out in their adult lives attempting to build good credit. It 's just a natural progression for most of us because we all build credit by financing our first car, renting our first apartment, getting that first Visa card and in many other ways that come with growing as an adult and taking on more and greater responsibilities.
While credit cards can certainly be used for ill-advised retail therapy, that doesn 't mean they are completely bad. Actually, it 's important to maintain three to five credit cards to improve your credit score. That may sound somewhat crazy, but your credit history plays a big part in determining your credit score. In order to harness the power of credit cards for your own benefit, keep these simple …show more content…
This is a mistake. In reality, the credit bureaus have absolutely no way of knowing what percentage of your bill you are paying. If you are able, pay off your full balance each month, and avoid making unnecessary interest payments. Don 't forget, however, to keep all of your cards active. If you don 't use a card, it will become inactive, and an inactive card will cease to benefit your credit score.
So... credit card debt is a bad thing, but you need to maintain a certain amount on your cards to improve your credit score. The question, then, is this. What exactly should you be spending your money on? How can you use your credit cards to build good credit?
The pre paid card is much like a checking account debit card which charges your account as soon as you make purchases and once that happens the money is gone. With a secured credit card, your charges are applied against your credit line (equal to or slightly greater than the amount of your initial deposit), but are not billed to you until the end of the month, much like a standard credit card. Once you receive that end of month bill, you can either pay off the total amount or make the minimum payment required by the card issuer. In the case of a secured credit card, those payments are usually reported to the credit bureaus and if made on time, will contribute to the improvement of your credit score. This is a very important
While credit cards can certainly be used for ill-advised retail therapy, that doesn 't mean they are completely bad. Actually, it 's important to maintain three to five credit cards to improve your credit score. That may sound somewhat crazy, but your credit history plays a big part in determining your credit score. In order to harness the power of credit cards for your own benefit, keep these simple …show more content…
This is a mistake. In reality, the credit bureaus have absolutely no way of knowing what percentage of your bill you are paying. If you are able, pay off your full balance each month, and avoid making unnecessary interest payments. Don 't forget, however, to keep all of your cards active. If you don 't use a card, it will become inactive, and an inactive card will cease to benefit your credit score.
So... credit card debt is a bad thing, but you need to maintain a certain amount on your cards to improve your credit score. The question, then, is this. What exactly should you be spending your money on? How can you use your credit cards to build good credit?
The pre paid card is much like a checking account debit card which charges your account as soon as you make purchases and once that happens the money is gone. With a secured credit card, your charges are applied against your credit line (equal to or slightly greater than the amount of your initial deposit), but are not billed to you until the end of the month, much like a standard credit card. Once you receive that end of month bill, you can either pay off the total amount or make the minimum payment required by the card issuer. In the case of a secured credit card, those payments are usually reported to the credit bureaus and if made on time, will contribute to the improvement of your credit score. This is a very important