Don’t cut up your credit card
Posted in: Credit Cards
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Just change the way you use it
With credit card fees and interest rates seemingly on the rise, it may be tempting to grab those pieces of plastic and grab the scissors, but that may not be the best course of action. Not only can closing an old credit card account potentially hurt your credit score, you can lose out on other benefits, too.
Despite the problems that can potentially arise with credit card use, credit cards can also have a number of built in advantages, including strong consumer protections, warranty extensions, rental car insurance protection and more. Giving up those protections could be costly and counterproductive, so think long and hard before you make that first cut.
If you want to enjoy the benefits of credit cards while avoiding the hassle and the expense the key is to change the way you look at credit cards.
For all too many people credit cards seem like free money – at least until the bill arrives. For those unwary consumers that monthly bill is a major surprise, and many of those shoppers will find themselves unable to pay the entire balance.
One of the best ways to avoid those unpleasant surprises is to treat your credit card as you would a debit card. Each time you make a purchase, be sure to set the receipt aside and write the amount in your checkbook.
Deduct the funds just as if you had written a check or used a debit card. Then settle up when the bill comes in, secure in the knowledge that you have the funds to pay the balance in full.
By using this simple strategy you can enjoy the many benefits of using a credit card, from increased warranty periods and loss protection insurance to reward points and airline miles.
Credit cards can provide a safe and easy way to pay – the key is to use the cards as prudently as possible.
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