6 STEPS TO BUILDING YOUR CREDIT USING YOUR CREDIT CARD

6 Steps To Building Your Credit Using Your Credit Card

To use a credit card to build credit, you are to be self-controlled. That is you should have the ability to control your desires and not the other way round. As this is necessary for your financial health and if not controlled, you may end up destroying your credit.

For those who are ready to do the needful in other to build their credit, here are the steps that need to be followed so you can achieve your aim.

6 Steps To Building Your Credit Using Your Credit Card

Avoid too Many Cards the Number of Cards You Have.

Too many cards are not necessary, as this will reflect poorly on your credit report. So you are advised to have one credit card. Also, opening a store credit card may not be the ultimate choice if you want to build credit.

This is because a store credit card charges an extremely high-interest rate which you might not be able to pay off in full every month. So they make more interest, compared to what you are given as savings. Again, it can be tempting to spend money whenever you have a store credit card. For your own good, stick to a credit card with a low-interest rate, no annual fee, and small credit limit or a credit card that gives a good reward if you want to build up your credit.

Try to Maintain a Low Credit Limit | 6 Steps To Building Your Credit Using Your Credit Card

To do this, you can call your bank and have them stop all automatic raising of the credit limit. To enable you to avoid much debt, pay off balances in full monthly and build your credit as well.

Also, do not use a card with high credit limit but a card with lower credit limit to enable you to control your spending and pay off balances in full as mentioned earlier because this is necessary when using your credit card to build credit.

Always Pay Off Your Balance in Full Every Month.

If you are able to manage your finances properly and pay off your monthly payments in order to build your credit history, it shows that you are responsible. That is your spending should be based on your budget to enable you to clear your monthly payments.

In addition, avoid heavy debt load by purchasing what you can only pay for in cash.

Keep the Amount of Your Used Credit Low.

When using a credit card, do not use a large amount of your credit or almost all your available credit. That is, if you do carry balances for a few months, try not to exceed 30% of your available credit limit, as this alone will reduce your credit score.

Don’t be Moved By the Free Gifts from Credit Card Applications.

After applying for some credit cards, you might be given some gift such as; free pizza, t-shirts, e.t.c. And some people, because of these gifts,  sign up for a card and later canceled the card after getting what the want.

You are to be careful because if you possess many cards, open a credit card, or cancel cards your credit score is affected negatively. So avoid having much credit card.

You can also use the tips below.

Using a prepaid credit card is a good option since it gives you an opportunity to control your spending and shows that you are responsible and ready to apply for a card with a line of credit.

But be sure you can financially handle a credit card before applying for one. That is being able to follow up your budget and make your monthly payments in full.

Although, having a credit card is not bad, but it can be used wrongly and this may lead to financial problem. If you cannot manage a credit card do not apply for one.

6 Steps To Building Your Credit Using Your Credit Card

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