This holiday shopping season, the majority of shoppers will be looking to find ways to save money. This is especially true for those who commonly go over their budgets when this part of the calendar rolls around each year. As a result, some people tend to view their credit cards as “debt creators”. However, credit card use doesn’t have to put a person in debt. In fact, in can do quite the opposite by improving one’s credit score.
It’s all about how people use their credit cards. And as Golden Girl Finance reveals, by way of Slice.ca, “you may even be able to improve your credit history by charging all your holiday purchases to your card.” How so? There are a number of ways that people can use their credit cards wisely to earn more benefits in the long run. As a business owner who accepts credit cards, you may want to pass this information along. Here are six tips.
1. Charge only a little at a time and have it paid off in full before the end of every month. There’s no easier way to avoid debt than to pay a balance off in full. If customers are doing just that, they’ll improve their credit scores over time. “Some experts cite 10 percent with others citing as much as 30 percent as being the maximum amount of your credit limit that you should use at any time,” says Golden Girl Finance.
2. If you need more plastic, apply for two credit cards at most at a time. Credit cards have many benefits. It’s important not to forget that customers often get rewards points and cash back when using their credit cards in your store. As the site points out, you may want to use more than one card to maximize benefits. “Ideally, you should aim to get one with a low interest rate for big purchases and one with a rewards feature for everyday use,” it reads.
3. Take this opportunity to check your credit score. Before one can improve his or her credit score, it’s important to know what that credit score is. “Make sure all lender concerns are cleared up, no items are in collection, and no discrepancies go unnoticed,” Golden Girl Finance continues, “Go into the new year with a clean slate. Credit bureaus are often eager to mail consumers free reports once a year.”
4. Don’t be late and don’t make excuses. Again, it’s all about making payments on time. By offering your customers the option of being able to pay with their credit cards, they are afforded the ability to extend payment on their purchases. But as the site informs us, “paying your card on time – even if only the minimum – is one of the greatest factors affecting your score. The detriment to your score grows each time you’re late.”
5. Pay your bills twice this month. This may sound like an odd tip. But, for those shoppers who plan on doing a lot more spending than they are used to, it may be wise to make smaller payments more frequently than to allow too much interest to accrue on their outstanding balances. “Rather than making one full payment at the end of the month, aim to pay a portion of it just before the statement closing date and the remainder just before the due date,” Golden Girl Finance credits Curtis Arnold of BestPrepaidDebitCards.com as saying.
6. Don’t close any cards, but do try to get varied types of credit. When people want to limit their spending, they often tend to cancel their cards, thinking that it’s the plastic itself that has caused their problems with debt. People should do just the opposite, says Golden Girl Finance. “Closing your cards looks bad on your credit report,” they write, “just stow them away somewhere where you can\’t easily access them.”
For information on how to upgrade from your current payment provider or to begin accepting credit cards with a new POS terminal, contact Canadian POS Corporation at 1-877-748-2884 today!