The Basics of Credit Cards

Most of us have credit cards however we aren’t actually taught how to efficiently use credit cards. There is no training program that we go through in order to fully understand the benefits of credit cards and also how to avoid getting into trouble with them. Since most lenders don’t really want you to reap all the benefits of their credit card only, they won’t tell you how to carefully use it so as not to get yourself into a vicious debt cycle.

Statements

Don’t think of them as 100% right. They are only right 90% of the time and the rest of the time it is up to you to identify the error and report it back to the credit card company. There’s quite a lot of fraud going around and sometimes you might find that there are some weird charges on your statement that you didn’t make. Always look through the statement thoroughly to ensure against incorrect charges.

Bad Credit Histories

Many people have the false impression that having a bad credit history precludes you from obtaining a credit card. This is not true. Credit card providers know that people with bad credit account for a large percentage of the population and they really can't afford to leave potential customers at the door. Instead most major lenders and even some credit unions offer special cards that cater to these markets. The major differences between credit cards designed for individuals with bad credit and normal cards are the low limits and stricter terms and conditions.

Dealing with Errors

More often than not, if you are diligent in looking at your monthly statements you will come across charges that you are 100% sure you didn’t make. In these cases you’ll have to take the case to your credit card company. Flip over your card to the place where you sign and you’ll find the card’s service center number. Call the number and tell them that there is a mistake in the statement. Take down the name of the service representative and follow the instructions correctly. You will more than likely have to sign a few papers and fax a few things back and forth. It will generally take credit card companies up to 30 days to clear the wrong charge.

Interest Rates

This one is important so listen up. This is the single largest contributing factor to people falling prey to their credit cards. Interest rates will generally range from 18% to 24% depending on the type of card. This means that if you purchase something and carry a balance to the next month that you will pay the interest rate on the balance for the month. It might not seem significant now but in actual fact it is quite deadly. The general rule is to never carry a balance on your credit card unless the purchase is 100% necessary. It is the act of carrying a balance that creates trouble so you should try your absolute best to refrain from it.

Lost but not found

This is more serious than it may sound. Most people think that they can simply let the card go and not report it stolen. They think that since it is stolen it can’t be used because of the signature requirements. This is simply not true. Scammers can pick up your card and charge it very easily without even signing anything. This is where the trouble begins. If you find that you have lost your credit card it is imperative that you tell your credit card company so they can cancel the card and give you a new one.

Negotiating with the huge Credit Card company

Many people have the false impression that it is impossible to deal with the credit card companies when in actual fact most are actually quite reasonable and are happy to listen to your issues. They will actually understand that sometimes bad things happen to good people and the majority of times they will do their best to be accommodating. They might grant you an extension on your credit limit, an interest free month etc. All you have to do is to be ready to negotiate with your credit card company.