As we enter a New Year, it is likely that a lot of you will have already decided on a resolution. For others, you may be struggling to decide on one this year, or you may not be a fan of the whole New Year’s resolution thing! Either way, one thing you do need to do is make sure you use your credit cards wiser in 2018. We should all make an effort to improve our financial standing, irrespective of how it stands at present. With that in mind, read on to discover some of the best credit card tips to follow this year.
Put together a debt repayment plan
There is only one place to begin if you have outstanding debts, and this is with paying them off. Putting together a debt repayment plan is a must. This is where a lot of people go wrong. They simply say to themselves that they are going to pay off as much of their debts as possible per month. However, this is a recipe for disaster. If you have no control over your finances, you could leave yourself short for bills, or you may find that you never pay off your debts because you are spending too much money elsewhere.
The only way to deal with the money you owe effectively is to have a thorough understanding of your finances. You need to determine how much money you have coming in every month, and when. You also need to decipher how much money you have going out, and when. Next, look for opportunities to make some savings. Most people are spending more money than necessary. Call up your utility provider to find out whether you can go onto a cheaper tariff. Why not cancel one of your monthly television subscriptions? Do you really need all of them? Once you have reduced your outgoings, you will have a full understanding regarding what you have coming in and out every month. But, before deciding how much you are going to attribute to your debts, you need to attribute a portion to living expenses.
Make sure you give yourself a realistic amount to live off. You are only going to make life more difficult for yourself if your calculations are way off. Now you can decide how much you can afford to pay off every month. Most experts advise paying off your biggest debt first and working downwards, others advise to pay the smaller debts first to gain momentum. Simply work out what works best for you. Just Keep in mind you will still need to make the minimum payment on the rest of your accounts each month to avoid any extra charges.
Take the time to educate yourself regarding using credit cards and your credit score. A lot of people go wrong because they don’t fully understand what they are agreeing to when they sign up for a credit card. They don’t understand the terms and conditions, the APR, and any fines or fees they could be subject to. They also don’t understand the impact all of this has on their credit score. So, give yourself a bit of reading to do for the year ahead, and get up to speed with everything you need to know regarding borrowing money and maintaining a good credit score. You will thank yourself for it, and you will feel much more confident about making decisions that impact your financial future.
Ask for a higher credit limit
If your credit score isn’t as good as you would like it to be, why not ask for a higher limit? This can increase your credit rating in two ways. Firstly, if a lender is willing to offer you a higher limit, this shows that you are a low-risk lender. Not only this, but you will be using a lower amount of your available credit, which is another way a higher limit will increase your credit score. Needless to say, this is only going to apply if you do not use the added credit that has been given to you.
Think twice before applying for another credit card
As much as we try to prevent it, there is every chance that we may find ourselves in need of a bit of help throughout the year. From unexpected repair bills to time off work due to medical reasons, there are a number of reasons why people find themselves looking for a new credit card. However, before you dive right in, it is important to assess your options carefully. Is a credit card right for you? Perhaps it would be better to go for a loan such as those offered by lenders like Unsecured Capital. This all depends on your financial situation; there is no right or wrong answer. However, you do need to think about your options carefully, as every application you make will feature on your credit report, whether you go for it or not.
Make sure you are using the right card for you
There are many different types of credit cards available today, offering a wide range of deals for people to take advantage of. However, just because rewards are being offered does not mean that you should use them for the sake of it. After all, rewards are only good if they are something you are going to be using a lot. There is no point in using a card that has flyer’s miles if you don’t travel on a regular basis, nor is there any point in using a cashback card if you’re trying to cut down on spending. These cards can often have a higher interest rate; so don’t let any offers tempt you unless they are actually going to be worth your while.
Set up mobile alerts
Have you missed payments in the past? This is one of the worst things you can do, as missed payments stay on your credit report for as long as six years, meaning they have an extremely detrimental impact on your rating. To stop yourself from missing payments, it is a good idea to set up mobile alerts. This is something that many large card issuers do, enabling you to benefit from an alert for a variety of activity. For example, you can receive an alert whenever your card has been used, if unusual activity has been detected, and when you are approaching your credit limit. Of course, you can also set an alert for when your statement is ready and your bill is due. If your card provider does not do this for you, you can always set up manual alerts on your smartphone using the calendar or alarm app.
Check your credit report regularly
In order to manage your credit report, you are going to need to check it on a regular basis. This is important so that you can monitor whether your score goes up or down, and what you can do to improve it. It is also a good idea to check your credit card statement on a regular basis too. This will ensure that you pick up on any signs of fraud quickly.
Avoid overseas’ fees
If you are planning on taking a vacation in 2018, you need to be mindful about using your credit card abroad. For most credit cards, and debit cards for that matter, you will be subject to a foreign loading fee. Charges vary considerably, so make sure you are fully aware of the terms and conditions of your credit agreement before you use your card overseas.
Set up a direct debit
Another way to make a payment on time, aside from setting up mobile alerts, is to set up a direct debit. This is a lot easier than most people imagine – you can usually set it up over the phone or online. You can also usually pick the date of the month you wish the direct debit to be deducted, ensuring you pick the most convenient date for you. You can also determine whether to pay the minimum amount or the full amount on your card.
Don’t apply for a card you have no choice of being accepted for
Last but not least, make sure you don’t apply for cards simply for the sake of it. A lot of people apply for cards on the off chance that they will be accepted because of the amazing promotional offer or low- interest rate associated with the card. However, if you are rejected, this will show on your credit report, which will have a negative impact on your score. This is why it is a good idea to use one of the eligibility checkers to see if you have a good chance of being accepted. Soft searches like this will not show on your report.
So there you have it: some top credit card tips to follow for 2018. From applying for an improved credit limit to putting together a debt repayment plan, follow the steps that have been mentioned above for a brighter financial future this year. Make 2018 the year you get your finances in order, and you will feel much better for it.
What’s your main financial goal for 2018?