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Credit Cards: What You Don't Know Can Hurt You
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BE
AWARE OF TEASER RATES
Credit card companies sometimes offer low
introductory interest rates to attract new customers. These
rates typically last for only a few months and then jump as
high as 20 percent. It’s important that you carefully
compare offers from several different issuers before
selecting a card.
STICK WITH ONE CREDIT CARD
Just because it’s easy to apply for multiple cards doesn’t
mean you should. This is especially tempting when department
stores offer discounts on purchases if you apply for a
credit card. It’s easier to manage one credit card and pay
off only one bill at the end of the month. Besides, applying
for multiple credit cards can hurt your credit rating. Also,
using one credit card to pay off another is a dangerous
practice that should be avoided.
PAY IN FULL EVERY MONTH
Get in the habit of paying the balance in full each month,
which means don’t charge more than you can pay off at the
end of the month.
PAY ON TIME
Send the credit card payment several days in advance of the
due date to allow for mailing time. Late penalties are
costly and some companies will increase the interest rate
after one or two overdue payments.
AVOID CASH ADVANCES
Be aware that the interest rate on cash advances can be much
higher than the rates charged on purchases.
PROTECT YOUR CREDIT HISTORY
As soon as you start using a card, the payments, whether
paid on time, late or not at all, become part of your credit
history. A poor credit history can affect your ability to
rent an apartment, get a job, or buy a car or house. What’s
more, the mark stays on your credit record even if the bill
is later paid.
DON’T EXCEED THE CREDIT LIMIT
This helps avoid penalties and ensures that you will have
credit available in the event of a true emergency. A $2,000
credit limit doesn’t mean you can afford to carry a $2,000
balance.
REVIEW STATEMENTS CAREFULLY
Immediately inform the credit card company of any
discrepancies or errors on your monthly statement.
REPORT A LOST OR STOLEN CARD IMMEDIATELY
Keep a copy of your credit card account number and the
financial institution’s name and customer service telephone
number in a convenient place in case your card is lost or
stolen.
PROTECT PERSONAL INFORMATION
Never provide your credit card number unless making a
telephone, mail order or online purchase. Also, don’t let
anyone else use your credit card and don’t charge purchases
for other people.
Learning how to use credit wisely now will help you avoid
serious credit problems later.
Created by
the American Institute of Certified Public Accountants and
the California Society of Certified
Public Accountants. |
