Managing Your Credit Account – Best Practices
Once you have your new credit card, your next step is to properly manage your account to help you build credit and take advantage of all your card has to offer. You also want to practice active management in order to avoid potentially expensive pitfalls like credit card late fees or fraud. Here are the essential best practices to help you master credit card management, become a super savvy account holder, and gain peace of mind.
Stay Aware of Your Account With Regular Monitoring
Rule number one for managing your account and successfully practicing credit card fraud prevention – pay attention! A simple review of your account will let you know how much you’ve spent in the current billing cycle, while also alerting you to any fraudulent activity. This won’t just help you manage your account, it will also help you manage your finances.
Monitoring is easier than you think. You can download your credit card’s mobile app onto your smartphone and check your account while waiting in line for coffee before work. You can also log in at home on your computer. Make a commitment to yourself to check your card account before you sign into Facebook or start browsing the evening news.
You can also utilize free budgeting apps to see how your spending is pacing with your budget. A quick glance at your budgeting app will tell you if you’ve already spent your budget for the month and should stay in tonight for dinner rather than treating the family to a meal out.
Never Miss a Payment
A history of on-time payments is a core foundation of a high credit score. One of the best ways to guarantee you never miss a due date is to set up automatic payments. You can set up automatic, recurring bill pay payments from your bank to pay a pre-determined amount towards your credit card account.
Remember that if you do use bill pay through your bank, your minimum payment will fluctuate with your balance so you should be sure to supplement your pre-determined bill pay amount to meet your minimum amount due, failing to do so could result in a late fee. Keep in mind, you can always make additional payments to maintain a low balance on your credit card account, but be aware: some credit cards do have caps on the number of payments they can process each month.
It’s also important to account for the timing of your payments. Bank account bill pay payments can be sent very quickly via an electronic ACH payment. Alternatively, you can use your bill pay feature to mail a check to your credit card issuer. Generally, you should send your payment at least 7 business days before the bill’s due date to account for mailing and processing times, but contact your credit card issuer to confirm.
Credit Card Fraud Prevention
What happens if you do see an unexpected charge on your account? Didn’t spend $432 to book a hotel room in Tahiti? Call your credit card company immediately to verify and dispute the charges. In the case of credit card theft or fraud, your card company will likely cancel your card for you and issue a new one with a different account number.
It is also wise to monitor your other accounts in case more of your financial information was compromised. Also, follow up with all three credit bureaus to ensure no new accounts were opened under your name.
Getting the Most Out of Your Credit Card Account
And finally, as you build your account management skills, you can also start using your card to build credit and even save money with responsible bill paying and optimal use of your credit card rewards.
To give your credit score a boost over time, aim to keep your balance below 30 percent of your limit.
Maintaining a healthy credit utilization ratio will improve your credit score.
In order to reduce what you pay in interest, pay more than your minimum each month.
Stay on top of your points and cash back rewards and ensure you redeem on time and get the maximum amount of points possible if your card has rotating spending categories.
When you actively manage your account, your credit card can do more for you than just simplify your finances, you’ll gain peace of mind.