It takes more than just on-time bill payment if you want to use your credit cards properly. You must also be on the safer side to protect yourself from fraud, use reward to get more benefits, and build a good credit score by using your card.
Here are few important tips that’ll help you to manage your credit cards in 2017:
1. You must pay off debts with high interest
You need to control your credit card balances in 2017.
The Federal Reserve has informed that short-term interest rates might take a leap by a 0.5% point or more in 2017. So, it’ll have an effect on your credit card bills.
According to a calculation made by the TransUnion –
If the Federal Reserve increases the rate by 0.25%, 82% of the variable-rate credit account holders may have to add $10 more in their monthly payments.
So, it’ll be wise to pay off those credit card debts that have high interest. You’ll never know how much the rate might increase when the time comes.
2. Use your cards carefully at gas pumps
You must be careful while using your cards at the gas stations. Most of them haven’t converted to chip-enabled terminals. All the gas stations must update their terminals by October 2017 or they’ll be liable to compensate any fraud committed at their terminals.
But for now, you need to follow these steps to protect yourself:
- Use only those gas pumps that are near to the gas station store. Most of the times, the criminals use skimmers at those gas pumps that are away from the stores.
- Try to pay your dues inside the store directly, rather than at the pump.
- If you don’t have any choice but to use your card at the pump, make sure you use your credit cards only.
3. Use a reward credit card as per your need
Reward points are useful if you use them. If you don’t use your points much, having a reward card is probably not a good idea.
Credit account holders don’t use thousands of rewards points and reward miles each year.
According to a recent survey, 15% of the credit card holders don’t use travel rewards points to pay off a trip.
So, being a smart consumer, consider using a rewards credit card that’ll give you cash back benefits.
But remember, a rewards card usually comes with a relatively higher interest rate. So, it’s probably not suitable for you if you have too much debt.
4. Set up notifications in your phone
If you’ve issues to keep in mind about every possible transaction, or every credit card account, you can set up automatic fraud detection and notification system.
Just ask your card issuer to set up mobile notifications that can inform you about below-mentioned situations:
- When you’re close enough to your credit limit.
- If any unnatural financial transaction happening or from any unfamiliar locations.
- Each time when your card is getting used.
5. Check your credit card statements and your credit report regularly
You must remain calm and patient to fight against fraud. Don’t forget to check your credit card statements and your credit score regularly. Your financial statement will show you every possible sign of fraud.
If you find any, ask your credit card company and credit reporting agencies to take required steps.
If you can see any unknown account on your credit report like a mortgage, credit card or other, call your creditors immediately.
You can fetch your credit report once a year from each 3 of the main credit bureaus. It is advisable that you collect your credit report once in every 4 months (one from each bureau). You can also grab it at AnnualCreditReport.com.
6. Try to keep your credit score intact
If your credit accounts always carry a big amount of balances regularly, that can negatively affect your credit score.
Your credit score will get the blow even if you are regular with your monthly bills.
Huge balances on your credit account increase your credit utilization ratio. The credit utilization is a prime factor of your FICO score (30%).
It’s better if you can keep your credit utilization lower than 30%.
7. Ask for a higher credit limit
If your credit score is getting lower, you can ask your credit card company to increase your credit limit. If your credit limit becomes higher, the difference between your credit card balance and available credit limit will also increase. Thus, your credit utilization ratio becomes low, which may increase your score.
A recent survey revealed that every 8 out of 10 credit card holders were approved for a credit limit raise. But the problem is only 28% of cardholders dare to ask for it.
8. You can freeze your credit account
Scammers and fraudsters may use your personal information to open new credit accounts. You can prevent this crime by checking your credit report regularly. But it’s only the way to grab those frauds that have been done already.
You can stop scammers to open new accounts by freezing the current credit account.
When you ask your credit card company to freeze your credit, you’ll order the major credit bureaus to prevent anyone to sneaking at your credit file.
9. Keep patience for the chip-based card
In 2017 fewer than half of all retail merchants have processed chip-based credit and debit cards. But still, some merchants are encouraging the magnetic stripe swipe or dip terminals. They still misguiding consumers by saying that the chip-enabled terminal is slow or difficult to use.
Do not entertain such misguidance. This is all in the name of fraud protection. Chip-based credit cards are much safer than other credit cards. It has a superior security system that’ll prevent the con artists to misuse your credit card details.
So, wait some time until you have your chip-based credit cards in your wallet.