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27 Aug 2019   /   0 comments


Caroline Mwandawiro


Have you ever experienced a high level of denial or rejection in your life? If yes, sure it wasn’t about credit card and if it was, it time to outgrow such because this article will absolutely save you some great deals. Keep this in mind as you read through “Prudentpeople are always on the lookout for information that keeps them informed rather than being deformed by ignorance”.



Though it is obvious that using a credit card can be a convenient means of carrying out transactions, it is important that you always be on the watch on how you swipe that little plastic. This is because, as small but important as your credit card may be, it has the potential of keeping you in debt and shattering your credit score – sure you won’t want to have such happen to you.

Let’s take a ride through some sincere recommendations that will help you keep a clean credit record and qualified for various types of loan – auto, home, business, be it small, medium or large as the need may arise.

1 Think Twice Before Co-signing for Loan:

Combining friendship and business (money) can be a step in the wrong direction. In your attempt to stay true as a friend – possibly as a true friend indeed who is always there for a friend in need, you have to think and rethink about such commitment.

By implication, what this means is that you have signed and accepted to pay and take responsibility where the borrower (whom you stood in for) fails to make their payment as at when due. So, wisdom is key and required in such cases since this can greatly affect your credit status.



2 Multiple Credit Card Applications At Once:

You may not know this, each credit card application you file in has the potential of pulling off your credit score. So, when you suddenly start the application process for multiple credit cards within a short time frame, it is possible that you’ll encounter multiple denial and rejection from potential lenders since you give them every reason to be suspicious and worried about your abrupt applications for credit cards.

Preferably, credit card applications should be done one after the other on the basis of necessities that are actually worth getting a new credit card.

3 Always Opening New Card and Closing Out Old Ones is Not The Best:

When it comes to your credit score and credit card status, apologies if you are convenient with the saying ‘use it or lose it’. To be frank, the opposite of this phrase applies to your credit card and credit status since closing or canceling your credit card account will rarely do any good to you.

In case you never knew, credit score is a summation of your account’s age and the ratio of your debt to credit, so leaving your older credit cards open will be a great step towards obtaining a better credit score. Here is a secret you may not have known.

  • It’s Best To Leave Your Old Credit Lines Open

Lenders feel more comfortable with an old credit card that has a low balance compared to a new card that just pops out maybe from a store you possibly have an interest for a big-ticket item. Even though you cleared up your debts in such cards, it may surprise you to discover that your overall credit score is bound to reduce and apart from this, the record of age on such accounts are wiped off.

Even when you are planning to relocate from one city to another, its best to leave your old credit lines open instead of jumping in the euphoria of migration to close out all or some of your credit cards except in cases you discover and you are sure that closing your credit card account won’t have any negative impact on your credit score.


4 Keep A Minimum Credit Utilization:

Stocking up multiples credit cards or lines on your wallet is cool and can boost your credit report but the problem always arises when these lines are usually used up. Ideally, it’s always advisable that your credit utilization and balance should be within a range of 30% of the total credit limit that your lender has agreed for the card issued to you.

Alternatively, you can keep a low credit utilization if you have a low balance credit card you have been using over a long period of time, you can and it’s easy to meet your lender to make arrangement for some increment to your credit limit.


  • The All Or Nothing

It is wise and better not to have the habit of “all or nothing” – that is, either you are using almost everything in your credit card and almost maxing out or you are not using it at all. What this can only do to your credit score or status is a fluctuation in credit score because at the time when your usage was pretty low, you’ll definitely enjoy a rise in your credit score but when you are all out to drain everything in your credit line, it won’t be surprising that your credit score will have to drop in the same pattern.

Understood that it is obvious that our taste and expenses tend to increase with an increase in our income, so in such cases, the best you can do to yourself and your credit score is making sure that the load you drop on your credit card is that which you can easily clear conveniently, and once you are able to keep up with this, you can then approach your lenders for an increase in your limit maybe on a quarterly basis or after six months.

5 Timely Complain About Lost or Stolen Credit Card:

Lost or stolen credit should be reported as soon as possible to your credit card issuer because further delay after your credit is nowhere to be found and there happen to be any fraudulent transactions with your credit card, you will definitely have to pay and be liable for such fraudulent charges.

6 Too Much Hard Inquiry is A Wrong Signal:

Agreed that the harmless-looking credit card offers to flood your mail on a daily basis can be very tempting and once you sign up for these, its sure that you are so in for a lot of debts to pay. Above this, you have to consider future needs and the consequences of accepting virtually every credit card offer to your account.

You might be wondering “Hard Inquiries, what are they?” This is one secret your creditors won’t tell you as you accept those credit cards offer and sign up for a new card. While applying for a credit card, every lender will raise a flag known as hard inquiry over your account and once your account is having so much of these red flags within a short period – say 12-month, potential lenders will be left with the impression that you possibly will be having a tough time clearing your debts.


  • Your Hard Inquiry Flags Are Increasing From Each Offer


So, when you have all these running and your hard-inquiry flags are already much, there is every possibility that potential or new lenders will be scared or holding back from granting such offer irrespective of how important the situation at hand you need the money for maybe.

You may think to yourself “am really broke at the moment and so the best option is signing up for multiple credit cards offer”, don’t forget this … your hard inquiry flags are increasing from each offer and so narrowing your chances of getting better-deserving credit in the future.

7 Loaning Out Your Credit Card:

Remember that once you loan out your credit card to someone else, you definitely won’t have any control over the use of your card at such a moment. So, it wise you only do this to trusted persons since you will bear the responsibility of paying every bill they have incurred with your card alone.

8 Never Let Your Credit Card Be Charged-Off:

Getting your credit cards charged-off is one of the worst experience you could have with your credit score and credit report and this takes about 6 months of failure to make payment to get your credit card charge-off. In most cases, charge-off listing is valid on your credit report for up to seven years and this can potentially hinder your chances of getting credit cards and loans someday no matter how important or urgent your needs may be.

9 Ignoring Your Credit Statement:

This is your credit card handbook – if you don’t mind, you can call it your credit card operation manual. Your lenders on their part will always make sure that statement report of your credit card transaction comes in on a monthly basis and early enough to get you prepared for some important dates and modifications in terms and conditions of credit card use.

If you are the type that is always busy with one tight schedule or the other, and may not have the time to go through your monthly statement, it is pertinent you squeeze this in as one of your must do/check. When you fail to do this, it’s possible that you may be missing your payment due date and in some cases where you didn’t forget, you might be paying less than what is expected on time.


  • Missing Your Due Dates


Not only can you miss out due dates, once you ignore your credit card statement report, but it is also obvious that you are likely to miss out on some important information concerning slight or major changes to the terms of your credit card.

On the other way round, where there is a fraudulent transaction or deduction going on in your account, your statement slip/report will always be the first avenue to give you a hint of such irregularities, and so, it is wise to pay a rapt and maximum attention to billing statement as they come in.

10 Never Make Late Payment:

After all, there is no late fee charged for late payment, I’ll definitely pay as soon as possible (which may seem not soon enough). Never let this thought give you the reasons to make late payment for your credit products.

As harmless as late payment may seem, it actually has an effect (a negative one at that) on your account. Always paying late is sure to do just one thing to your account and that is; constantly reducing the percentage of your on-time payment and in some cases, a backlog of late payment over a period of six months can surprising rise to a $38 bill – sure that would have taken care of some products.


  • Automating Your Minimum Payment


However, there are possibilities that you may not be out-rightly postponing payment for your credit product, there are chances that this may come as a result of sheer oversight, but your credit agent doesn’t know this. If forgetting is your reason for always making a late payment, the best way to overcome such a habit involves automating your minimum payment for each month to fall around the same time each month.

Preferably, to have a balance about the issue of late payment, making an additional payment every month or having a reminder set to this regard can be a better alternative to combat late payment aftermaths. It will be no news that there is anyone who would enjoy the feeling of having creditors always hounding him for their money due to late payment or un-cleared credit products.

11 Get to Understand Your Credit Card Terms& Conditions:

Different credit card issuers have a different approach to punish defaulting debtors. So, having a full understanding of how your credit cards issuing institution or company handles various breaches in a contract such as late payment is likely to help you to stay conscious of such penalties and try your hardest to avoid being punished.

Besides your creditor’s approach to you when you default terms and conditions, if you have a better understanding of your credit card terms, this will give you a wider range of control over your credit card.

Typically, you will be able to know the dos and don’ts about your credit card and your creditor’s respond to any action you make with regards to your credit card. It’s also necessary to take out time from your tight schedule at least twice or thrice in a year to review your credit card terms and conditions which can be found on your creditor’s website or contact the customer service unit to provide you with one


12 Go Beyond Your Minimum Payment:

Creditors sure want you to make debts payment in a comfortable manner by giving just a minimum monthly payment balance you always have to make and this can to some extent serve as a strategy to keep you off debts.

But on the other way round, here is what you are in for when you stick to just making the minimum payment on a monthly basis – minimum payment doesn’t just increase the interest rate you have to pay for your credit card but it also increases the length of time which you’ll have to pay off your debt.

Sure you know that more time spent means more interest accumulated.  Going beyond your minimum payment can be a smart way of paying off your debt within a short time and at a lower cost, though it may be demanding to do when you consider other necessities that require money.

The bottom line remains that you’ll definitely take a sigh of relief when you remember that log of debt is off your neck.


  • Conclusion

While the small plastic is designed to give you convenience during transactions from just a swipe, your usage and attitude towards the use of your credit card can turn its intended convenience during transactions to a log of debts you’ll have to pay – possibly painfully. Nevertheless, a sincere recommendation for you while using this plastic cash is that you pay attention to the mistakes others refer to as being “common”, it’s definitely sure your experience with your creditor will always be a more friendly one.

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