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Managing Your Credit Card

Credit card offers are everywhere: they pop up on your computer screen at work; they speak to you at home via your TV; they arrive by mail advertising 0% interest rates; and they tempt you with exciting rewards like free airfares, dream vacations, and flashy merchandise. It's hard for anyone to say no when faced with so many "good" offers: A good offer can turn into "really bad news" when you can't make your payments, or make them on time, resulting in late fees and possibly an increased interest rate.

Of course, credit cards do serve a convenient purpose and, if you manage your credit cards carefully, they can be of great benefit to you. However, if they are misused, they can become a nagging headache that won't go away easily.

Credit Cards and Improving Your Credit

Have a checkered past?
If you have a poor credit history due to late payments and nonpayment, credit card issuers will most likely consider you a high-risk potential customer. One way to make it over the bad-credit hurdle on your way to building a good credit rating is to obtain a secured credit card and pay it off regularly.

While it may be difficult for some of us to get a credit card -- it's not impossible. It'll just take a little planning and perseverance, but you can begin to rebuild your credit history.

Here's what you can do:

1. Build up a savings to use as a deposit on a secured credit card.
2. Apply for a secured credit card. Your credit limit will be the amount of the savings that you deposit with the credit card issuer.
3. Use your credit card for purchases-but remember, don't overspend! Charge only what you can afford to pay off each month.
4. Pay your credit card bill on time. Send your payment so it arrives on or before the due date.
5. At all times, maintain your account so it is current and within the guidelines of your credit agreement with the credit issuer.
6. After a year of prompt payments, check with your issuer and see if you qualify for an unsecured credit card.
7. With your new card, continue the healthy habit of paying off debt on time.

Your credit rating will improve over time, and you'll be more likely to get a loan when you need it the most, such as when buying a home, or applying for a car loan.

Better Safe than Sorry

Protecting your credit history can mean more than just practicing responsible spending habits, it also requires being careful with how you maintain the card and the account itself. As a card holder, remember these important tips:

Do:

• Sign and activate your card as soon as it arrives.
• Record your account number and expiration date for safekeeping.
• Keep the phone number and address of the credit card company in a secure place.
• Keep an eye on your card when you give it to a clerk and make sure to retrieve it promptly.
• Draw a line above the total whenever you sign a receipt.
• Save receipts to compare with the billing statement and look for unauthorized charges.
• Report in writing any discrepancies to the credit card issuer.
• Phone the card company immediately to report your card if it is lost or stolen. Once you have made the report, you are not responsible for subsequent unauthorized charges.

Don't:

• Lend your card to anyone.
• Leave your card or receipts lying about.
• Sign a blank receipt.
• Give out your account number over the phone unless you've initiated the call and are certain you're dealing with a reputable company.

Fair Warning - Some words to the wise

In most states, credit card companies can change the terms of your credit card agreement with 15 days notice. To avoid any surprises in your credit card terms, always read the fine print in the flyer inserts accompanying your credit card statements.

Learn more about a ClearPoint Credit Counseling Solutions Debt Management Plan.