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The Good Side of Credit Cards!

Updated on May 18, 2009

The cost of credit has always been the catalyst to debt for many consumers. You borrow this much up front and later, you agree to pay this much back. Not all credit offers are bad. Sometimes those sky-rocketing interest rates can drive a potential consumer away but not when its an introductory annual percentage rate (A.P.R.) of 0% for purchases; the offer seems too good to be true but such offers do exist.  Some credit card companies offer a way for their customers to see what their FICO credit score is every month which is really good if you want to track your score on a monthly basis.  As long as you have a steady flow of income coming in every month, and are good at money management, building your credit history will be as simple as logging into

When you receive offers for credit in the mail, make sure you read how much the A.P.R. is for purchases and also if there is a monthly or yearly fee involved to open the account. These are the first two pieces of information I look for before accepting a credit offer. If there's an annual fee or A.P.R. above 25%, I end up shredding the offer. However, without credit, there is no credit history.

Establish a good banking history with your checking account. Never overdraft your checking, never write checks that will bounce, and never have a negative balance. Instead, synchronize your checking account with your credit card account online for easy online bill payments. You don't have to lick an envelope, waste $0.42 cents to mail your payment in, and the process of online bill payments is a lot faster than having to send the payment in the mail.

If you're just starting out with your first credit card, always pay your credit card on time.  Always make the minimum monthly payment but it's best to pay the entire card off each and every time you use it.  Right now I have 5 open credit card accounts, 4 with Chase, and 1 with CapitalOne.  Since I am good with my money, I always pay my card every time I use it.  If I'm at the dollar store and I buy something with my credit card, that same night I'll pay that credit card off online with my checking account.  Over the past 2 years, I was able to start building my credit score up again after coming out from 7 years of not paying off a serious delinquent account.  I noticed that these small charges and immediate payments can boost your credit score anywhere between 20 and 40 points.  I tracked my credit score for two years with my WaMu credit card that is now become a Chase card.

These are some of the good things about credit cards.  Sometimes you'll get great offers such as free credit score tracking, 0% A.P.R. for 1 year on purchases, and cash-back rewards.  And sometimes you'll get the not-so appealing offers but credit cards don't have to be the root to your debt and a bad credit score as long as you manage your money wisely!  Think of what a good credit score can do for you down the road when you want to buy a house.  The first thing the bank is going to do when you buy a house, is pull information from either of the three credit reporting bureaus, Equifax, Trans Union, or Experian and once they view your credit history, you will know if you qualify for a mortgage or not.  Also, having a good credit score will affect your chances of enjoying a low-monthly mortgage payment and a great interest rate.

Credit cards are just the beginning to building good credit so long as you don't abuse the account by not making any payments on time or charging over your credit limit.  Paying your card off on time or in full each and every time you accumulate a balance on your credit card account will open the doors for better credit card offers because you're showing credit card companies that you're a good consumer, you manage your money wisely, and you can pay off your card in a timely manner.


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