Credit Cards Do's & Dont's

Credit cards enable people to shop or buy online. To establish credit you may start with a very small “line of credit.” That means credit card companies, such as Visa MasterCard and American Express may issue you a credit card with your name on it.

If they issue a credit card to you that obligates you to pay the credit card company monthly, on time, in accordance to their “terms and conditions” meaning their rules.

You will receive a monthly statement, a summary of your purchases and the total amount you owe, and the date that the payment has to be received from you, not the date that you put your payment in the mail.

If you pay your statement on time over a period of months, it is quite likely they will increase your “line of credit.”

A “line of credit” or “credit line” is the maximum amount they will allow you to purchase. Some credit card providers may give you some leeway to exceed your credit line occasionally as long as you pay on time.

If you do not pay your statement on time, the credit card company may suspend your account or “give you a slap on the wrist” by reducing your “line of credit.” The consequences will affect your ability to obtain credit from another credit card company, department store, or an Internet provider such as eBay or Amazon.

Credit agencies and every credit card provider store everyone’s credit card information and they all share your information. Vendors decide whether or not they believe you are worthy of obtaining credit from their store or service.

The best habit is to pay your credit card statement as soon as you receive it, if possible. A statement is usually a monthly tally of all your transactions providing you with the total amount you owe.

What’s the best credit card to choose?

The credit card business is extremely competitive and some companies prove benefits that others do not. For example, Amazon’s Prime Visa card purchases at Whole Foods Markets deduct 5% off your purchases.

Other credit card companies provide benefits and others do not. Be a smart consumer and check out the choices that you have and do your homework.