If you’re one of these young consumers and you wish to know how you can handle yours in the best way possible then, we suggest you employ the following secured credit card tips:
• Don’t max out your credit card. What does the term “max out” mean? It means that you will charge all your purchases and expenses on your line of credit without thinking about going overboard or spending beyond the credit limit imposed on your account. Always remember that such poor credit habit can backfire on you – in the form of huge overdraft charges, declined transaction fees; not to mention the negative impact it will surely have on your personal credit history or on the credit profile of your parents.
This is the reason why we constantly remind our young readers, like you, to keep their spending in check. By doing so, you can avoid incurring, not just pesky fees and charges, but also a huge debt. Moreover, by using just a reasonable percentage of the spending limit or cap set on your credit account you can keep your debt-to-limit ratio low. And this will in turn help you build and maintain an excellent credit reputation for you to enjoy great financial prospects, later on.
• Never share your PIN code with other people. Having a line of credit is not something you should brag about. In fact, we discourage you not only from telling your friends that you have a line of credit but also from sharing with them your Personal Identification Number or PIN code.
Keep in mind that by keeping your code to yourself, you can prevent other people from gaining illegal access to the funds available on your credit account. At the same time, you and your parents can avoid being held liable for transactions you never made.
• Ask for and keep receipts all the time. After all, this tip will help you monitor your credit and payment activities as well as the available balance on your line of credit. Furthermore, by constantly asking for receipts and other financial records you can accumulate documents you and your parents can use for validating and for disputing errors in your respective annual credit reports.
• Submit on-time and complete payments to your card issuer or to your parents, especially if you’re using an extension of your parents’ card accounts. That way, you can help your parents avoid incurring late payment penalties and surcharges that are often imposed on delinquent credit cardholders.
• Watch out for fraudulent or unauthorized transactions which might be charged on your line of credit. If you discover that your monthly billing statements contain transactions you never made then, we advise you to immediately report this problem to your parents and to your card issuer. Always remember that you and your parents can only qualify for limited liability privileges if you can help them detect and report cases of credit fraud to the authorities, as soon as possible.
Employ these five secured credit card tips and we guarantee that you can achieve your goal of managing your very first line of credit in the most responsible way you can.
Emma Lee is a financial consultant and a freelance writer. She has more than 15 years of experience in helping consumers find the best prepaid, unsecured and secured credit cards. She regularly contributes articles to Secured Credit Card Site to provide readers the latest information about secured credit cards as well as the latest trends in personal finance.