Manage smartly your cards for high credit score
Getting credit card is easy these days. But keeping high credit score is very difficult. Here are some useful tips for managing your credit card.
Make sure you apply and open your credit card with a reputed bank or a popular brand. Never opt for several credit cards. This will lower your credit score. It is advisable to have no more than two credit cards in your name. A third card can be taken with some caution.
You got to read through all the terms and condition of each credit card. It is laborious job to go through all the fine prints, but it is worth it. Also do check in the fees and penalties periodically, as the same is often changed at short notice.
Use only 40% of your credit limit to have advantageous effect on your credit score. Always open your credit card account with very high credit limit, even if you don’t use the whole available credit limit. This is definitely beneficial to your score. If you feel, the credit limit is very low, you can always request your banker to increase the credit limit.
For the same reason, don’t close your credit cards too soon, even if you don’t use them for long. This will affect your credit score.
If you feel like closing a credit card, then close the most recent credit card. The number of years you keep a card can give positive impact in credit score. Don’t close your oldest credit card.
It is wise to rotate your cards in usage. Make sure you use all your cards, in rotation. Some card companies will close your account if you don’t use your credit for 6-months and more. Don’t keep your credit card idle for 6-months – use it at least once in 6 months. Also remember the pay-by-date for each card. As well, you need to remember the credit limit each card has.
Pay off your dues on time. Payment defaults attract high penalties and interest rates. And this will also affect your credit score. Paying off all your dues before the pay-by-date is always a MUST.
For reason beyond your control, if you have defaulted payment, you can bargain for a lower interest rate. If you credit track record is good, you can prove yourself and talk to bank official for lowering your interest rates. In most cases, the bankers oblige, if you hold good track record of paying on time.
In summary, here are quick tips:
- Go for high credit limit for your credit cards. Or request your banker to increase your credit limit on your existing credit card.
- Don’t get too many credit cards. Two cards are enough. A third is OK, but with some caution.
- Rotate your credit cards. Some bankers close credit cards not used for six months or more.
- Pay off your dues on time, every time.
- Bargain to lower interest rates, if you have defaulted payment for the first time in years!
- Read the fine prints – go through carefully all the terms and condition of the credit card.
- Check Fees and Charges periodically.
You can add your tips on managing your credit score in the comments column below.
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