Tip 6: Store credit cards aren't always a deal Every time you open a new department store or retail credit card, your credit score takes a hit. The new account lowers the average age of your credit history, a key component of a credit score. A lender will also pull your credit report during the application process, known as a "hard" credit inquiry, which is also harmful to your score. If you don't pay off the entire balance, the upfront 10 percent to 20 percent discount you received likely will be erased by the card's annual percentage rate, which typically rises above 20 percent.
Tip 7: Follow best credit card practices To get the most from your credit card and avoid trouble, make sure to pay off your balance on time every month. That way, you won't pay unnecessary interest charges, and the timely payments will help boost your credit score. If you can't pay off the entire balance, stop using the card until you can.
Tip 8: Maximize your rewards Make sure your rewards credit card is working for you. Look for quarterly changes in rewards points and special rewards-earning promotions that offer more points for every dollar spent. You can get more rewards through your credit card's online shopping portals, too. These portals, which connect you to major retailers, will give you bonus points for every dollar you spend. Similarly, register your credit card with dining programs that will increase the number of points you get by dining at certain restaurants.
Tip 9: Learn how to dig out of credit card debt Develop a strategy for dealing with credit card debt, and be ready to follow it. Here are some of the basics: If your balances rise too high, leave those credit cards at home. Pay the minimum balances on all of your cards. If there's money left over, pay down the card with the highest interest rate before dealing with the others. Work your way from the highest interest rate card to the lowest to save the most on interest.
Tip 10: Know how to handle card fraud Make a habit of checking your credit card activity at least once a month, if not more, for odd charges. If you find an unauthorized transaction, or if you lose your card, immediately notify your issuer. The issuer will send you a new card and/or a new account number. Call the three major credit reporting agencies to put a fraud alert on your credit reports. Pull your reports to check for any fraudulent accounts. Check again six months later.
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