My Insurance Insider and Finance Blog

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“It is in the small decisions you and I make every day that create our destiny” -Anthony Robbins

Being a credit card holder, you always need to know that using a credit card meticulously is an important step towards building a good credit rating, particularly when you’re young and just starting out. So pay close attention the next time you’re offered a new card. When you’re trying to re-build your credit rating or trying to build a positive credit history for yourself, using the right credit card makes sense. Making your payments timely each month on your small purchases is a simple, reliable way to build an outstanding credit report.

The Things to Look For On a Credit Card:

When you receive a credit card application that offers a low monthly interest rate, make sure to examine the Disclosure Box before making a decision. Here you’ll see a very important credit term such as Annual Percentage Rate(APR) In the Disclosure Box you will get the information of whether or not the card has a grace period(usually 25 days) for which you are being exempted from finance charges.

Finding such type of credit card that offers a reasonable grace period isn’t difficult enough to get. If you won’t find a suitable one, then throw it in the trash and look for a better offer.If you are lacking in any credit history, a credit card company refuse to give you a very high credit limit. Still that’s perhaps best when you’re just starting out.

Calculating Your Card’s Monthly Finance Charges:

Probably you like to pay off your credit card balance each month to avoid paying any finance charges. But it may not be possible all the time and that’s why it’s important to know your card’s annual percentage rate, divided by 12 months that would give you the periodic rate at which you will be charged for your outstanding balance each month.

By multiplying the periodic rate times the outstanding balance, you can simply know your monthly finance charges. It may sound complex at first, but knowing this simple equation can make a big difference of how to use your credit card effectively. When you realize how much you spend on items that you fail to pay off at the end of the month, it would help you to resist the temptation of over-spending on your card.

Credit Card could be your Intelligent Tool:

Credit cards can be the great tool available to help you build a positive credit history. Making on-time payments, such as rent and other utility bills, are the ideal ways to build a great credit score. If you follow these techniques wisely I am sure, you would improve your credit rating within 1-2 years without making new purchases to maintain your good credit.