Things that you should know about credit cards

Learn things that no one tells you about credit cards including how to request a free credit report.

Disclaimer: I am not a financial professional

Before you open a credit card

Read the terms of use/contract: Make sure you read the documents carefully before signing anything

Don’t open several credit cards: If this is your first credit card don’t open several at once. Once you have established a good credit score, and are financially responsible then you can consider opening a second credit card. How many credit cards you have is a choice that individuals need to decide carefully.

Managing your credit cards

Pay your bill in full each month: Make sure you can pay your credit card bill each month on time to avoid paying interest or fees.

Use the 20/10 Rule

The 20/10 rule is a guide for managing your debt. First, you should not borrow more than 20% of your net pay or after-tax income. Then when you make your monthly credit card or loan payments it should be no more than 10% of your monthly income after taxes.

Contact Credit Card Company if you suspect fraud: If you suspect fraud make sure that you contact the credit card company as soon as possible.

Start by paying one expense: Start paying for one expense each month such as gas or groceries and pay it off each month. This will help you start to slowly build a strong credit score if this your first credit card.

You can request a free credit report: If you live in the United States you can request an annual credit report for free according to the Fair Credit Reporting Act. The FCRA program requires Equifax, Experian, and TransUnion to provide free credit reports upon request every twelve months.

In order to request your free credit reports, you need to go to annualcreditreports.com, not the individual companies. But they also have a phone number and a form that you can send back to also request your credit report. You can also go to the Federal Trade Commission to learn more about your rights regarding credit cards.