It’s true a credit card gives you financial aid at times of need but it has a few bad points as well.

When do you need a credit card?

If you cannot buy big items in one go or make big cash payments you will need credit card. You can spend any amount of money within your credit limit. But if you have been managing well without one avoid as it could ruin your credit rating if you default your debt payment.

Another reason for applying for a credit card can to improve your credit rating by taking a secure credit card or making monthly payments in time your credit score improves in a couple of months and you can get approved for loans that were giving you trouble.

What if you default on your payment?

If you default on your payment its downhill for your good credit score goes to vein, if it becomes too bad you may not even get approved for loans.

Security: credit cards are more secure cause even if someone makes a illegal transaction the money can be reverted back to you as you have not yet paid for it which is not possible in case of debit cards at times. Few places like hotels accept only a credit card so you can face a little problem there. But remember not have too many cards, as more the no. of cards the more no. of bills you have to pay.

How to know your credit is bad

You credit rating is given by your FICO credit score it depend on several factors like if you pay your bills and premiums on time, if you the whole credit bill or only the minimum amount required. You can easily get your credit report from FICO, how do you decide your credit is bad:

•  if your credit score is between 500 to 580 then you have poor credit you can get a loan only if you put down a down payment of 5 to 20% on your loan amount.
•  if your credit score is between 580 to 620 its fair credit but you will have to some down payment the interest rates are average.
•  if your credit score is between 620 and 640, its average credit you should be able to take loans without down payment at reasonable interest rates.
•  if your credit score between 640 to 700 it good credit you will be able to get low interest rates on loan without down payment.
•  if your credit rating is 700+ its superb you can get a loan at cheap interest rate without down payment depending on your income and few other factors.

Decrease you interest rate with just one phone call

Well are you barely keeping up with your home loan and credit card bills then it is high time you make a call and ask the company to lower the rate down a bit. They can reduce interest rate or decline your request but until you ask you will not know. In US a survey was carried out where many people asked for a drop in interest rate and 50% of them had their interest rate slashed. Yes the rest of the people were not entertained but who knows the cuts you interest rate by 1/3 just by one phone call, if you don’t try even the bank is not interested in helping you.

You must be thinking then why don’t most people do, they don’t do it as just like you they don’t know about it. If you are a good customer and you have paid your entire bill on time this is the chance for you. Do not talk to the customer service sourly, tell them if there is any way in which the interest can be cut down a bit, tell them you are happy with company but interest rates are a bit tough on you and you are receiving offer of lower interest rates but you are trying not to switch your credit card. You work hard entire month to earn your paycheck of course you are the only one who can optimize it so make a call today itself to change you interest rates.