One of the unfortunate realities of our credit conscious society is that having and maintaining a credit card is necessary to every adult's financial life. But how does a debtor just out of bankruptcy, learn to win the credit card game? Let's take a look at a few tips:
- Keep your balance at zero. Carrying a balance on your credit card is what credit card lenders want. Credit cards that have a balance incur interest charges and when credit cards incur interest charges credit card lenders make money. If you want to win the credit card game, make sure that you pay off your balance every month.
- Avoid paying any fees. Many credit card lenders with annual fees and other fees target borrowers just out of bankruptcy. Unfortunately, many of these fees can add up to hundreds of dollars per year. Protect your future income by only applying for credit cards that do not have annual fees.
- After a year or so of paying on your credit card successfully, talk to your lender about lowering your interest rate. Even if you never carry a balance, you never know when you may need to carry a balance for a month or two in the future. It's better to have a lower interest rate that will save you hundreds of dollars a year.
- As we said in our first tip, don't keep a balance on your credit card. However, if you are forced to carry a balance make sure that you pay more than the minimum payment required. Paying the minimum payment required will leave you in debt for years and have you paying sometimes double or more in interest charges over the life of the loan.