If you own a credit card, below are six practical steps on how you can manage your account more efficiently to avoid bad credit:
1. Be aware of your credit card’s exact terms.
As a cardholder, it is your duty to abide by the Terms & Conditions of your credit card. Thus, it is very important that you thoroughly understand all the rules of your issuer before signing up for a credit card.
2. Ask for a lower rate.
Did your credit card issuer increase the interest rate? If yes, you should have received a 15-day advanced notice about the change in your APR. As soon as you receive this notice, call up your issuer and ask for a lower rate.
You may even politely tell your credit card company that you will switch to another issuer because you feel that the increase is unreasonable. If your issuer refuses to grant your request, try calling them again after a month to discuss your issue. However, if you really feel that the increase is unreasonable, there’s no reason why you shouldn’t look for another card with a better deal.
3. Maintain an excellent credit score.
It is more likely that your credit card issuer will listen to your requests if they know that you are a customer worth keeping. Maintaining an excellent credit score would work to your advantage especially when dealing with creditors.
4. Pay off your entire balance each month.
Why should you pay more than your original balance when you can avoid the interest rate by simply paying off your full balance on time? If you really need to carry over your balance for the next month, pay off as much as you can from your charges so it would be easier for you to pay off the rest of your charge on your next payment due date.
5. Don’t use your credit card when shopping.
If you’re strolling around malls or boutiques, it’s best to leave your credit card at home. Why? It’s easy to give in to the temptation of buying something “nice” or something “on sale” out of an impulse. Even when you don’t have the cash, having a credit card in your wallet will most likely move you to make the purchase.
6. Never be late.
If you think that occasional late payments will not affect your credit score, you’re mistaken. Even a single late payment can pull down your final credit score by a few points. Many credit card companies impose an increase on the rates based on the card holder’s payment history and credit history. You’ll be in a much safer position if you keep your credit history in excellent standing.
