One of the most common mistakes made by new consumers is not reading their credit card remaining statement carefully. Many consumers who obtain a credit card do not learn how to read this important document and use it in an effective way. As a result, they often find that they spend more money on interest than the actual balance of the credit card. Here are some things to keep in mind when you are going to read your credit card remaining statement.
The first thing you will need to do before you read your credit card remaining balance is to determine your credit score. If you have excellent credit, then you should see a zero balance. If you have average credit, then you may see a balance as high as seven hundred and fifty or eight hundred dollars. Your credit score will tell you the amount of interest that you will pay as well as the amount of your available balance. If you find that the amount of your available balance is higher than the balance left on your credit card, then you should probably call your credit card company and ask for a lower balance transfer fee or lower interest rate.
After you have determined your credit score, the next thing you should do is to look at your credit card balance. Do you see a large amount of interest that you will be charged if you do not pay off the balance? If so, you should probably consider reducing the credit card balance. You should keep in mind that once you transfer your balance to another low interest credit card, your credit card company will report the transfer as a new credit card balance which will show up on your credit history report.
Another thing you should keep in mind is to make sure that you are not increasing the balance on your credit card. For example, if you have an introductory rate of four percent, and you then decide to get a higher interest rate, this will add three percent onto the balance. This could mean that you end up paying quite a bit more each month in interest. It is better for you to use the interest savings to pay down your credit card balance, instead of adding to it. Keep in mind that if you have a zero balance, the credit card company may provide you with an incentive to stay the course and pay off your balance in full.
Before you start calling your credit card companies, you should also take a look at your spending habits. Are you someone who eats out a lot, but only uses one or two credit cards? Then it is likely that you will be maxing out your available balance much faster than someone who is conservative in their spending. If you are someone who checks their credit card balance every month, but uses a different one for spending purposes, then you will likely be charged a higher interest rate. Instead, you should pay close attention to your total monthly payments and only make these payments when your card is empty.
Finally, you should make a list of expenses each month, and figure up your card remaining balance on a monthly basis. You can also take a look at your expenses online at the financial planning website Gooflight. Here, they have created a free online budget that can help you track your spending as well. The free budget is a great tool to help you figure out what type of lifestyle you live. It will also help you determine where you are getting the most value out of your credit cards. Once you have determined these things, you can then lower your monthly card payments and save money.
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