Owning a credit card is a great responsibility that too many people often take for granted. Credit is a convenient tool for buying items that you may need immediately but cannot afford at that particular time. Credit cards are also necessary when shopping online. The greatest problem many credit card owners currently face is overwhelming debt. After missing several payments you will begin to notice that the high interest rates coupled with the previous months outstanding balances will become near impossible to repay. It is for this reason that any credit card holder should be in full control of his or her spending habits and credit card activity.
You may be wondering, How do I monitor my credit health vigilantly? There are a few guidelines that will help keep your credit card expenses within a reasonable limit. If you consistently put these into practice you should realize a noticeable improvement in your credit score and a decrease in monthly credit card bills.
Avoid these habits to get your credit back on track:
-Stop buying things that you couldnt buy without a credit card. This is a trend that is observable in the majority of the credit-card owning population. Many people believe that all sources of available funds should be used indiscriminately. However when using your credit card, consider what you could usually afford and only buy those things that are truly within your budget. Your credit card is not a gift of unconditional wealth, it is merely a loan that must be repaid. Use it wisely.
-Dont only pay the minimum balance per month or allow the balance to be carried over to the next month. Try to pay the balance in full so that you can lessen any additional finance charges that your late payments will undoubtedly attract.
-Stop purchasing simple consumer goods like food with your credit card. You will be paying interest on these items long after you have used them.
-Dont max out your credit cards. Just because your creditors have set credit limits on your cards does not mean it is okay to spend up to those maximum limits. It is better that you create your own limit based on what you earn. Ideally your limit should be no more than you are able to afford monthly.
My Credit Health Review: Whats involved
To have a general idea about your credit health you will first need to access your credit report. This report will include personal information along with your credit history. All Americans are allowed one free credit report under the Fair and Accurate Credit Transactions Act (FACTA). You can get this report from any of the three agencies currently in operation: Equifax, Experian and TransUnion. Or, visit the government-sponsored website at www.annualcreditreport.com to get all three reports. By reviewing your credit reports you may also catch any errors that may be present and ensure that your credit is in optimum condition.
The second part of reviewing your credit health will involve accessing your credit score. This will usually come at a cost and is calculated using complex formulas. Having a low credit score will result in higher payments of finance charges while. A high credit score will reflect positively on the borrower and result in lower finance charges. A large part of the calculation will involve your payment history, amount owed and length of credit history.