A credit card can be a great financial tool if you use it wisely. An online report by consumer.gov gives the following facts about the credit card.
With a credit card, you get a bill once a month for everything you buy with the card.
You may pay extra money as interest if you don?t pay your entire credit card bill every month.
You can use a credit card as a safer way to pay for things online.
You can build a credit history using a credit card if you pay the whole bill every month when it is due.
Credit cards are safer to use when you buy things online
You may have a problem with something you buy online; it is easier to get your money back if you use a credit card.
Another online report by bankofamerica.com adds that you need to use your credit cards to build a credit history, but that doesn?t mean you must carry an unpaid balance. In fact, your best strategy is to use your credit cards and pay off the bill in full each month so that you keep your overall debt-to-credit limit low.
If you don?t pay at least the total minimum payment on your credit card bill, your credit card company may report it as a missed payment. This can bring down your credit score and make it more difficult to qualify for credit in the future.
Check your statement for the minimum amount due, and always pay it on time to keep your account current. Remember: Paying more than the minimum amount due is a great way to pay down your debt.
There is a danger in applying for new credit accounts for your credit score, even if you don?t use the card.
Frequently applying for new credit can hurt your credit score, so make sure you really need that new card before you apply for it.