The vast majority of us would rather not be without our credit cards. It is not so much that they are difficult to apply for any more, but they used to be and we still feel pleased about having them. They are also very practical of course - it is like having an ATM in your bag, to which thieves and muggers have no recourse.
However, what about if you already have two or three cards that are maxed out? Is the offer of a new card so welcome then? It is a tricky question. On the face of it, we all know that the correct answer ought to be ‘no’.
But it is not always that straightforward, is it? After having enjoyed the convenience of credit cards, it is a nasty blow to have them impounded.
There can also be decent factors for wanting a new credit card. What if the new card accepts balance transfers at an APR of zero percent for six months? That could save you a great deal of money if you are currently paying 20% on the total debt.
In fact, if you exercised total abstention from using the card recklessly for six months, you might be able to rescue your decent name from immanent tarnishing, because once you begin missing payments or are late a couple of times, that could affect your credit rating and the worse your credit rating, the higher the APR you will have to meet in the future.
It is a real shame that people, especially young people, are not taught that one’s credit rating is a very precious asset in its own right. If you tend, nurture and take care of your credit rating from your first loan, you will be able to borrow a fortune in later years at the very lowest interest rate because of your credit history.
There are a number of easy steps to doing this.
The first is always pay off your loans and never be late for or miss a payment. If you can see this happening owing to an event beyond - truly beyond - your control, warn the credit card company.
Secondly, use your credit card to pay for everything, particularly the large, one-off purchases, but pay the card off before the end of the month when the first payment becomes due. In other words, only use the card for a free short-term loan.
Thirdly, when you have been following these tactics for a year or two make a point of asking for a rise in your credit limit each year.
Fourthly, stay on the look out for great offers, but remember that these offers are only for suckers. Use them to play the banks at their own game. Transfer balances to the lower APR cards if you are going to carry a balance. If you buy a car on the credit card, get a better loan to pay off the card, before you have to pay them interest at a higher rate,
Build up your credit rating as you would your personal reputation and you will discover that it pays dividends throughout your life.
If you are thinking of looking for low interest credit cards, check out the free information on our web site entitled Using Credit Cards wisely.