Credit cards bring a lot of ease with them. You do not have to carry cash with you everywhere. You can pay with the plastic money when the need arises. But as there are so many benefits of credit cards, some risks are also associated with them. To get the benefits of credit card offers 2016, you need to know their rewards as well as risks.
Your credit utilization ratio also affects your score. Credit utilization ratio is the ratio of balance utilized to the total credit available. If you have used more available credit, it will negatively impact your credit score.
Minimum due is calculated by the card issuing company. Most of the people think that by paying the minimum due, they will avoid the total payment for some time but there is nothing like that. If you are only paying the minimum due, you will also have to pay interest charges when you will be paying the total outstanding amount. So, you will not only pay in terms of the total outstanding balance but also the high interest charges.
Many of us do not bother to read the terms and conditions that come with the credit card and start using it however we like. We need to know what is written in those terms and conditions because by signing it, we are entering into the contract about which we know nothing. To avoid any problem in the future, read and understand all the terms and conditions that come with your credit card. Many companies charge a very high interest rate on cash advances but most of the people do not know as they have never gone through the terms of the card.
Another problem with using the credit cards is the unnecessary and impulsive shopping we do using our card. You go to a shop and, knowing you will not have to pay today, start purchasing unnecessary things with your credit card. It will just increase your monthly expense. It is also possible that you fail to pay when the payment comes due. It will just negatively impact your credit score. What you need to do is limit your usage of credit card only to necessary things.
When you are applying for any type of credit, the lenders make an inquiry about your credit score. This inquiry affects your credit score. So, if you are applying for more than one type of credits, keep in mind that it will affect your credit score. You can enjoy credit card offers 2016 but do not apply for many cards at the same time.
It is your duty to review your monthly credit statement regularly. It is possible that there are some goods that you did not purchase and they were included in your statement by mistake. It is also possible that you are being over charged for any service but you do not know. All these extra charges will add up to your final costs. If you do not pay attention to them, you will have to pay for the things you did not utilize.