When it comes to credit, some people prefer the ignorant bliss method: Don’t look at your credit, don’t worry about your credit, don’t even think about your credit. This method can actually be quite effective for several months or even years — that is until you’re thinking about buying a new home, leasing a new car, financing a new computer, or whatever else you’ve been dreaming up.
Here are some sobering statistics for anyone who recently graduated from college:
- 70% of students graduating with a bachelor’s degree are leaving school with student-loan debt
- The average class of 2014 graduate with student-loan debt owed $33,000—earning them the distinction of the most indebted class ever
- 2014 graduates face a 8.5% unemployment rate and 16.8 underemployment rate
In the credit card world, there’s really no better feeling than earning rewards for your spending. Who doesn’t like getting a little bonus for purchasing everyday expenses with some plastic?
But lost in the excitement of air miles, cash back, and gift cards is the fact that getting the most out of your credit card rewards requires some extra know-how and a bit of work. Want to squeeze every last drop of value out of that rewards card? Here are some tips.
Ever since the financial crisis, credit issuers have become increasingly judicious about giving out credit limit increases. It wasn’t unheard of to be granted an astronomical increase to your credit line just by merely asking. Now issuers are being a little more thorough when processing requests for limit increases.
Establishing credit when you’re just starting out can feel a bit like a catch-22: to establish credit, you need to get credit; to get credit in the first place, you need to have an established credit history. It can be an infinite loop of frustration (one you should get familiar with if you’re a recent grad — to get a job, you need work experience, which you can only get if already have a job . . .).
Luckily, breaking free of this paradox isn’t as hard as it initially sounds if you know where to start and know what to do once you get going.
When people think about identity theft, they often focus on credit card fraud—someone racks up fraudulent transactions on your debit or credit card. This type of identity theft can be extremely frustrating, but luckily, credit card companies and banks have security measures and processes in place to keep your cards protected. It’s the other types of identity theft you have to worry about.
There’s an endless supply of theories on how to manage your debt in a healthy, responsible way. Some believe not to get into debt at all while others rack up credit card after credit card with little consideration. Neither extreme will likely have a positive impact on your FICO® Scores, but luckily most people fall somewhere in the middle.
If you’ve been stuck on the credit card debt treadmill for a while, struggling to make anything more than the minimum monthly payments, you’re probably looking for a way out. Maybe at some point this brilliant idea occurred to you (maybe it was in the middle of the night and it came to you in a dream and you shot straight up like they do on TV and said it aloud): “I know what I’ll do! I’ll pay off my credit card with another credit card.”
Yes, you can use one credit card to pay off your balance on another — though it isn’t all that simple and comes with a few caveats.
It’s no mystery that credit card companies charge interest on outstanding balances. And most credit card users are at least nominally familiar with their credit card’s APR (annual percentage rate). You carry a balance, you get charged interest — simple enough.
Beyond that, things start getting a little murky. How is your APR determined? How do interest charges get calculated? And at what point does your balance start accruing interest charges anyway?
We all know the consequences of using credit cards irresponsibly: crushing debt, late and missed payment fees, poor FICO® Scores, bad breath (okay, maybe not one of those).
Of course, using credit cards wisely comes with a number of benefits. In addition to being a secure and convenient way to make payments, credit cards can help you establish and build credit, give you access to valuable rewards, and can even help improve your scores. To help you play the credit card game wisely, here are 5 smart moves to make.