Credit in a New Country:

A Guide to Credit in the United States

Tips for Smart Credit Card Use

• * Don't pay interest on items you don’t really need, or for things that will be gone by the time you get your bill. Otherwise, it's the opposite of getting a bargain – it is like buying that item marked up instead of marked down!
  
  
• * Read your credit card agreements and the correspondence you get from issuers. There may be important information in them. For example, credit card issuers can generally change your interest rate with only 15 days written notice – even on a card with a fixed rate.
  
  
• * Always mail your payments for your credit cards at least 5 business days before the due date. Most credit card companies have steep late payment penalties. In addition, your interest rate on new purchases as well as any current balance may be raised to a very high rate if you are late.
  
  
• * If you pay your debts late, a late payment will likely to be reported to the major credit bureaus and will stay on your credit report for seven years. Your other credit card issuers may raise your interest rates if they see you are falling behind on other accounts.
  
  
• * Call the credit card company if you can’t make a monthly payment on time. Ask them about alternative payment arrangements that won't damage your credit or raise your interest rate. A credit counseling agency like Consolidated Credit Counseling Services Inc. can help you work out a payment plan with your creditors if you're having trouble keeping up.
  
  
• * Notify your credit card issuer 30 days before you move, and don’t assume that just because you didn’t get a bill you don’t have to pay it. If a bill doesn't arrive, call your card issuer or lender immediately.
  
  
• * Try to pay off your total balance each month. Just paying the minimum is a trap. If you pay just the minimum of a $1,000 debt on a card with an 18% interest rate, it will take you more than 12 years to repay.
  
  
• Aim to keep your debt payments at less than 10% of your income after taxes. If you take home $750 a month, for example, spend no more than $75 a month on credit