A Quick Guide to Credit Card Basics
Credit cards are a double edge sword. They can help make your life a financial heaven and hell depending upon how you use them. Following are some tips on using your credit cards wisely. The benefits of using your credit card wisely include but not limited to cash back, bonus points, airline miles and at best a great credit score. On the other hand if you decide to use them in an unwise fashion, you might end up in a mountain of debt.
Rule No. 1 is to pay off all you balance every month. You will have to pay interest on your spending if you don’t do that and that interest rate is very tricky. It takes a lot of discipline to pay back balances on time. According to a recent report by Federal Reserve, Almost 40% of all house holds in America carry a substantial amount of credit card debt.
Protect Your Credit Score
Make all your payments before the date they are due. Late fees can pile up quickly as they are around $20 - $50. If you miss more than two payments that will automatically increase your interest rate to “Default Rate” (around 24% to 30%) . Late and missed payments also lower your overall credit ratings. That can trigger interest rates on other loans to go up as well as getting soft loans in future impossible.
Only Keep the Cards You Need
Most of industry experts recommend that you should carry at least 2 and at most 6 credit cards. Stay in this range. If you apply for lots of cards that will damage your credit score. Similarly, closing many cards at the same time will also hurt your credit score. So better safe than sorry.
What if you don’t pay your credit card bills?
These are difficult times for our economy. Each one of us is feeling the pinch due to increased cost of living. It is getting very difficult to make ends meet. In difficult times like this it is very easy to amass a huge credit card debt. It can happen to anyone. Even to people who have been financially responsible. “Can I just don’t pay my credit card bills?” is the question many individual ask themselves and friends. This option is very much there. It also will give you some extra cash for few months ahead. But following are few of major problems you can get yourself into if you stop paying your credit card’s monthly payments.
Collection Calls
This is most scary part of Credit Card Game. Credit Card Companies will constantly call you and demand their money back. Collectors may call you 5 - 7 times a day. They will call you at home, They will call you at work and they will call you on your mobile phone too. There have been some reports that collection agents have been calling bosses, co-workers, and family members (which amounts to harassment and is not legal). They go to any length to get you on phone and when they get you on phone they use a lot of psychological techniques to lure you into giving them checking account numbers and other banking information. They will use every trick to make you pay. One of the well known methods is that they intimidate and threaten you by telling you that they will take your house, car etc. Or they will bring police to your home. all this can be very stressful on some people. You will also start getting letters in the mail from them that may eventually turn more demanding.
How to create iTunes account without credit card
There is a myth among apple users that iTune account creation requires you to provide credit card details. Well this is not true. A friend of mine just sent me following method of creating an iTunes account without the need of furnishing my credit card details. The method is very simple and I have just got an account for myself.
- Open iTunes
- Click on iTunes Store from the Left Side Pane.
What If you don’t cancel your credit card before you die?
Be sure and cancel your credit cards before you die!!
A lady died this past January, and Citibank billed her for February and March for their annual service charges on her credit card, and added late fees and interest on the monthly charge. The balance had been $0.00, now somewhere around $60.00. A family member placed a call to Citibank.
Here is the exchange:
Family Member: “I am calling to tell you she died in January.”
Citibank: “The account was never closed and the late fees and charges still apply.”
Family Member: “Maybe, you should turn it over to collections.”
Citibank: “Since it is two months past due, it already has been.”
Family Member : So, what will they do when they find out she is dead?”
Citibank: “Either report her account to frauds division or report her to the credit bureau, maybe both!”
