People often think that there is a big diet secret
they haven't heard of. They waste months and even
years looking for some magic combination of foods,
the perfect pill, and the ideal quick fix. All that
time they could be eating right and getting some
exercise, which, in reality, is the only way to
maintain or lose weight. The same is true, in essence,
for credit card rates. There's
no big secret to getting a better rate on your credit
cards, except that you need to build good credit.
If a credit card company can be assured that you
will not be a big risk, they can offer you a better
credit card rate. That means you will need to
prove, through your good credit, that you are worthy
of a good credit card interest rate.
There are a few ways to do this. Obviously,
the most important is to pay your bills on time,
and in full. If you use your card to make purchases
that are within your budget, and then pay the bill
for the items as soon as they arrive in the mail,
then you will have a very good track record with
your credit card company. Even if you don't have
a lot of money, you can use your credit card to
make small purchases you would be making anyway,
and then pay the bill before the items accrue any
interest. The most dangerous thing you can do to
your credit rating in this regard is to make a large
purchase and pay it off over a long period of time.
Not only are you not building a lot of good credit,
you are ending up paying a lot more than you would
have initially in finance charges and interest fees.
Get a secured loan. There is a
difference between a secured loan and a secured
credit card. A secured credit card is actually going
to cost you a lot more in interest than a regular
card. A secured loan, however, at a banking institution
can have a rate as low as three percent, and if
you have a secured savings account as collateral,
then you can be making back your interest in the
savings account while still paying off the loan.
This is a great way to build good credit before
you even get a credit card.
Pay your utility bills on time and in full.
You don't normally think about it, but things like
gas, electric, heating, and telephone bills can
go on your credit report as negatives, especially
if they get sent to collections. The easiest to
fall out of credit card grace with is your cell
phone bill. With all of the switching around that
people do, and the massive differences from month
to month with some plans, it can be easy to get
behind on payments for a cell phone. All of these
late payments and shut offs get sent to your credit
reporting agency, and bring your credit rating down.
If you follow the simple, common-sense rules for
building and
maintaining good credit, you can get the rates that
you are looking for. Essentially, just like diet
and exercise, a good credit rating is your
key to good credit card rates. Don't look
for a card that will be a quick fix, and you will
do just fine.
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