10 Credit Tips From Someone With a Perfect Credit Score.

I have heard many negatives about credit card ownership. From exceeding its limit, falling into bad debt, entering third-party collections, ruining credit scores, etc. For years, I received recurring letters from my bank to sign up for a credit card. I ignored their offer on multiple occasions because of the stories I’ve heard. I didn’t want the trouble, so I steered clear of credit cards. Until about 2019, I began reading articles on how to manage credit card balances.

I shared my interest with a co-worker, who told me that credit cards were trouble. I heard so many negative reactions about credit cards that I didn’t even want to consider getting one. Below, I'll share a few tips with you, how I successfully manage my credit card balance and avoid paying unnecessary bank fees.

Disclaimer: The information below may vary from country to country, but some charges may apply to all credit cardholders.

1. Choose a credit card with a bank you can afford.
Every bank has its terms for credit cards. Depending, on what those terms are you might find a bank that offers a lower interest rate, lower annual fees, and more benefits on their credit cards. While applying for my credit card online, I saw several credit cards that were been issued by my bank and the various charges associated with them. I analyzed the charges carefully and considered how they would impact my overall income.

I knew that I didn’t travel by air, so I overlooked the credit card that offered travel points. Additionally, I bypassed a Mastercard that offered a lower interest rate because the annual fee was higher, and I wasn’t prepared to pay that much on a card yearly for fees.
I chose a Visa credit card that had an annual fee three times lower than the Master card and an annual percentage rate of 47%. With added benefits of cash backs and three months no interest. Don’t be alarmed by the annual rate of 47%, as you read further, I will explain how I avoid paying interest on my monthly statement balance.

2. Never use your credit card to do cash advances.
During my credit card interview, the representative told me, not to use my credit card to do cash advances (that is to withdraw money at the ATM). The reason is that this option will accumulate an high charge in interest. Unless there is an emergency with no other means to obtain cash, this option should be avoided altogether.

3. Never buy everything you think you need, even if it’s a great deal

This is a major issue with many credit cardholders. They are tempted to buy the things they think they need because they can be purchased on credit and paid for later. A better approach to this is to only buy items you know that you need and can afford to pay back in full by your next due date.

4. Avoid late payment.
Why pay the bank an additional charge that you don’t have to? They are already charging insurance and annual fees that you have no control of. With my visa credit, I avoid late fees by paying my statement balance in full before the due date. Bear in mind that a partial payment on your minimum balance will still attract a late fee. The minimum balance must be paid in full. (The statement balance is the full amount owe during the period. The minimum balance is the amount that you're required to pay by the due date.)

5. Pay more than your minimum due or clear the monthly statement balance.
Paying more than your monthly minimum due each month will reduce your outstanding balance and increase your chances of getting a credit line increase. With my credit card, I avoid paying the minimum due monthly. I focus on clearing the statement balance.

Since paying more than the minimum due attracts interest charges. I want to avoid monthly interest charges, so I always clear the monthly statement balance. If you cannot clear your statement balance. You can still pay more than your minimum due, at least you will avoid late fees.

6. Make purchases after your cycle date.
Making purchases after your billing cycle date will allow you more time to repay those charges. For example, my credit card has a due date of the 13th month. My bills are printed on the 19th of each month. If I make a purchase on January 20th, that charge will not be due until March 13th because my bill for February was already printed from January 19th and has a due date of February 13th. Therefore, any charge made on the credit card after January 19th will not become due until March 13th. This allows me more time (over a month) to pay for the purchases I made after January 19th.

However, if I make a purchase between January 1st through the 19th, then I would have to pay those charges on my February's statement along with any other outstanding charges for that billing cycle date.

7. Try paying your monthly statement balance in full.
With my visa credit card, I am careful not to make purchases that I will not be able to pay for in full by the next due date. I do this to avoid paying interest on my statement balance. Paying the minimum due each month will avoid late fees, but it will not avoid interest. On my credit card interest is billed on the total statement balance and not the reducing balance. For example, my statement balance for January is $4000.00.
I pay my minimum due of $500.00 by the 13th, and I pay no more until my next due date. Yes, I will avoid a late fee, but I will see a charge for interest on my next bill due on February 13th. This charge will not be calculated on the $3500, I have owing on my last statement, but $4000.00, the initial statement balance. As much as possible, I try to control these charges.

8. Never go over your credit card limit.
Credit card companies charge over the limit fees. These charges can be avoided if you monitor your spending carefully. As much as possible stay below your credit card limit and purchase needed items that are within your budget. I have never paid my bank an over-the-limit charge and I don’t intend to. These charges are exorbitant, and I work too hard for my money to waste it on unnecessary bank fees.

9. Avoid going to collections.
Protecting your credit score is paramount. Lending agencies will review your credit report before you can acquire a loan from them. Don’t allow yourself or anyone to ruin your credit, especially, if you are young. Pay your bill every month, on time, and avoid additional fees (late fees, over the limit fees, interest). A bad credit score will negatively impact your financial future if you plan to acquire loans for mortgage, motor vehicle, business, education, etc.

10. Spend wisely
You can enjoy the liberty of using your credit card, without repaying more than you must. If you are new to the credit card industry be sure to educate yourself on the charges that you can avoid paying and steer clear of them. Some persons cannot acquire a loan due to bad debt, many are in collections, and many are struggling to get their statement balances down while accumulating more interest and late fees.
If you are disciplined in your spending habits you shouldn’t have these problems. Additionally, review the credit card options, lending institutions, your income, and select the credit card that fits your budget. There are some credit cards with higher interest rates and higher annual fees.

Yes, they may have an additional benefit (s), but if you can’t afford or will not use those benefits, then it makes no sense to apply for such cards.

As a visa credit card holder, I enjoy the freedom of paying a lower annual fee, cash backs, zero months interest, etc. The only fees that I look forward to paying are insurance and annual fees, only because they are mandatory.

Yes, credit card terms will differ with each lending institution and country, but it is a fact that whichever institution you acquire a credit card from you can avoid the following fees: late fees, over the limit fees, interest on cash advances, and accumulating interest on your statement balance if you control your spending habits.