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The following is a guest post from Marc Chase, President of Product Development for My Credit Group, a website dedicated to helping consumers with managing their credit.
For times when every little point can matter, here are 3 little-known tips to getting the most out of your credit score from your credit cards.
One of the most important and misunderstood aspects of maintaining a good-looking credit card account on your credit report is having the proper credit card utilization. For example, most consumers may not realize their credit utilization is broken down by credit score models into 2 categories: your individual vs. cumulative utilization; in other words, how each account looks on its own and how it affect your credit profile as a whole.
Not that there’s anything bad about having retail credit cards, but typically, they’re geared towards sub-prime borrowers and come with added fees not found on regular credit cards. Generally speaking, these might only be a good idea for consumers working with credit repair services, looking to improve their low scores; if you can get a bank card or regular, unsecured credit card, go with that option instead.
Ask most people when they should pay their credit cards, and they’ll typically tell you they pay when they get the bill. But did you know that if you wait until the due date, you’re already too late?
How can you avoid this? Find out your when your card company’s statement date is, and make sure your credit cards are paid at least 2 days before that time.
This last one is a little tricky. A lot of consumers like the idea of transferring some or all of their balances from one card to another, especially if they’re undergoing credit repair or are just trying to clean up their finances. This strategy makes sense if you’re saving a ton of money in interest fees, or if you were recently offered a new card with an introductory offer.
How about you all? Have you used any of these tips before? What things do you do to get the most out of your credit cards?
Share your experiences by commenting below!
Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.
- @Using your 2 cards with no balance for small purchases every month or else your account will be closed.
- Does any one know if the credit card companies will actually terminate your account due to inactivity? I didn’t think that they could. I just thought that it improved your credit score to have a running history of transactions on each account (that you naturally pay off each month).
- @When to pay your credit card balances – This is genius! I didn’t know that the credit cards don’t give you a chance to pay down your balance before sending the numbers off to the reporting agency to calculate your credit score! Good tip here!
- @Balance Transfers – Another thing to look out for here are fees. Many credit cards will offer you a low 0% APR on your transferred balance, but before it hits the account, they’ll slap it with a 5% transaction fee. This could further add to your debt! Watch out!
***Photo courtesy of http://swipecard.org/wp-content/uploads/2011/02/Credit-Card-Swipe1.jpg