Updated 03/09/2017

Congratulations are in order if this is the first time that you have owned a credit card! Having a credit card makes life a whole lot easier and buying things more convenient. I personally, rarely carry more than $20 in cash on me. I pay for pretty much everything with my credit card, but there is a method to my madness!

When I was younger I worked in a bank and my bank manager taught me a lot of what I know about credit. And he advised me, you have to use it, to make it grow. But you also have to be very responsible. In this article I’ll go over a few things that will make your credit card more than just a way to buy things. But a way for you to start building a financial future!

Building Your Credit You can use it to start building up your personal credit history, making your credit card a very useful financial tool. Once you have this card you want to show that you are a responsible person. So make the payments on time! Increase your credit limit : Every 6 months to a year you want to ask for a credit line increase. Some credit cards will do it automatically. While some will want to check your credit and current financial status before they give you additional financing. Its important to build a nice big credit line because of a concept called comparable credit. What is comparable credit: When you walk into the bank and want a loan of $35,000 for a car. They pull your credit and see your highest line of credit is $500. That’s a big leap of faith. Banks don’t make leaps of faith often! By building up your credit line you can easily have a credit line of $5000 and above within a few years. Banks will make a “hop” of faith lol

Make it a priority to pay off your credit card each month The first rule that you need to follow when you get a new credit card is to pay on time, and pay it in full. Why pay it off? Credit card debt is the #1 reason for filing bankruptcy. It easily gets out of control. By doing so, you will avoid paying late fees as well as interest rate fees. Your credit score will also be higher. When it looks like your credit utilization is low, its brings UP your credit score. One thing we do here when we see a client that is borderline on an approval. We tell them if they can, pay off their credit card so it shows less than 35% credit utilization and your score automatically will go up!

Create A Budget By creating a budget and sticking to it, you cut down on your impulse spending. Make sure you include all your bills in your budget and a little play money! But most importantly you should be saving a portion of your paycheck in a “rainy day fund”. When you create your budget you should also factor in your credit card usage. Your goal is to pay off your credit card debt monthly. Which means you have to keep your spending under TIGHT control.

Understand the CARD Act . On a regular basis, the issuer of your card will send you alerts regarding upcoming increases in rate changes – always remember to read these! The Credit Card Accountability Responsibility and Disclosure Act of 2009, (aka The Card Act) , requires that they must give you a 45 day advance notice before any changes can be made. Before the Card Act came into being. Credit card companies could increase your interest rates if you were late on ANY of your cards, not just the one you had with them. This Act put a stop to such unfair practices. Imagine you are late on your Amex card but not only does that interest rate increase, but ALL your credit card rates increase! If you are carrying a balance, it just became that much harder to pay things off! It was an unfair practice that was put an end to, along with many other unfair practices in the Credit Card Accountability Responsibility and Disclosure Act of 2009. Take the time to educate yourself regarding your rights, as well as any limitations, that fall under the CARD Act.

Be Sure To Read the Fine Print. Every card has terms and conditions that the issuer will provide and enforce. Reviewing your credit card Agreement every now and then will allow you to manage your card, and also keep these terms and conditions fresh in your mind.

Understand Their Reward System. Many people (including me) use reward credit cards. They can be very beneficial if used correctly. I have friends that enjoy the cash back cards. I personally love the travel cards. I like to travel and by using a mixture of cash and points I’ve stayed in beautiful rooms that I couldn’t afford ordinarily. We also use the benefits to upgrade our seats on flights. Hence the reason why we pay everything on credit card. We want the rewards! But we ALWAYS pay off all our balances at the end of the month! When choosing a reward credit card, make sure you do the following: You should know exactly how you are able to earn points, what the redemption rules actually are, and if there are any restrictions that you should know about which could affect the amount of rewards you receive for your purchases. If you cancel the card, how long will your points remain. Can they be transferred to another reward program? For instance. Our SPG card allows us to move points between many different airline reward programs. So we can take those points and transfer them to the airline of our choice to help us upgrade or just get a free flight.

Are you on a “teaser” rate or do you TRULY have a low rate card This should be a no brainer. But I’m surprised by how many clients tell me they choose a low rate card, but didn’t realize it was a “teaser” rate. A teaser rate is a rate credit cards give you for a short time. Usually 3 – 6 months. And then the card goes up to their regular rate. But they don’t have to go up! Put the date that the credit card teaser rate ends in your phones calendar and make it a point to call them before the rate is up. If you have good credit and have been making on time payments all you have to do is tell them you will stop using the card unless the rate continues. We have kept “teaser” rates for YEARS on our cards! And sometimes they even offer us something better so that we keep using the card! Exercise your good credit muscles!