Making Smart Choices With Credit Cards

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It goes without saying that the credit card is an incredible tool for consumers to use. As with any tool, there are ways to use it that can help you, and also things to avoid that could be harmful. The way you use a card can affect your financial health for several years, either in a positive or a negative way. Being responsible will help you help yourself, and there are many key ways you benefit from using a credit card.
One such smart way to use a credit card is to build credit as a new consumer. This is one of the most important periods of your life when it comes to your finances. The way you use your credit at the outset can set the tone for how your finances will pan out. To build credit, you want to use your card regularly, and pay it off as you use it. This pattern will show credit bureaus that you are responsible and on top of your finances. Being careless and maxing out your plastic shows a measure of irresponsibility, and ultimately leads you into a downward spiral of taking on debt. It is important to remember for the future that keeping your oldest form of credit open as long as possible will help you to build a good rating.
Another way to use credit wisely is to limit the number of cards open in your name. One way to do this is to avoid opening any merchant accounts, as these offer little benefit to you. Not to mention merchant accounts tie you to shopping at one merchant, making them one dimensional. Keeping between two and three cards open is a general rule to stick to. Maintaining a low number of credit cards is easier than trying to stay on top of four or more cards, making it easier to keep them in good standing. While having few credit cards can be helpful, it will do you little or no good if you don’t keep the balances low. High balances on credit cards will affect your ability to get credit somewhere down the road.
A line of credit is very valuable for consumers of all types. Making smart choices with your finances is crucial, and will help you when it comes time to finance a car or even a house. Keeping your card account balances low and keeping the amount of accounts you have open to a minimum will assist you in fortifying a strong financial standing that will benefit you greatly.

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