Looking for credit advice? Here are the cardinal rules of credit
by: AndreyBreit |
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When the economy suffers as it is doing these days the banks also feel the effects too. Each and every day we hear reports on the news about the credit crunch reaching the banks and the generous credit limits previously extended to their customers are fast becoming a thing of the past.
Your APR may rise overnight due a late or skipped payment, no matter how long you've maintained a pristine payment record. Plenty of people find themselves taking a cash advance on one credit card, to make the minimum payment on another. Cash advances mean a transaction fee, while making the minimum payment on the other barely keeps you afloat until the next payments are due. This type of activity can put you in a downward spiral which ends unhappily. Your credit rating goes down, your rates go up and you've got a mess on your hands.
It is at this point where you realize you cannot go on like this. You need some credit advice and you need it now.
If you were to sit down with your kids and try to give them your best credit advice, what would you say? You've been there, done that, and the credit advice you give them will be the voice of experience. Learn to follow your own advice. Here are the cardinal rules of credit.
1. If you cannot afford it - don't buy it. Use your credit cards to buy clothing, gasoline and other regular expenditures for which you have the cash in hand, and this way you will set up and maintain a good credit history by paying off your cards in full each month.
2. Unfortunately, from time to time we all have to pay for unexpected necessities. For example, you may find yourself in need of emergency dental treatment the cost of which is not completely covered by your insurance. You can use your credit card on this occasion, but only for this reason. Then, all you have to do is adjust your budget to allow for the cost of your dentistry to be paid off over the shortest amount of time. It may well be a great temptation for you to only pay the minimum amount due, but you will end up paying for your treatment well into the future and at a cost.
3. Nearly everyone takes little if any notice of this next bit of credit advice. When you go on holiday, don't pay for all your holiday souvenirs with your credit card. The lovely gifts you have bought for your family and friends will not be appreciated when six months on you cannot afford to pay for your household bills and other essentials.
4. However tight your budget may be, it is important to put away at least $10 each week. It's not a great amount but it will go a long way towards paying for your next root canal filling and it is sound credit advice.
The best credit advice you can be given is to simply live within your means and make sure you have a savings plan in play to pay for those unexpected things that crop up from time to time.
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About the Author
Andrey Breit is a credit consultant and very well-known for his knowledge on credit and financial products. If you lovethis article you will surely love his article on completely free credit report or if you need more information on credit, go to www.solutionforcredit.com.
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