As long as the question of convenience and safety is concerned, credit card perhaps comes among the top 5 essentials. Moreover, with credit cards, you also get the privilege of fraud protection, and with some other cards, you get some rewards for making purchases. These are the things that you can’t avail while purchasing using liquid money.

However, whether it’s 0 apr credit cards or reward credit cards, they bring with them a few risks that can affect your finances greatly. Never mind because we have come with a few tips so that you can manage your credit wisely.

Know “credit”
So before you apply for a credit card, make sure you know the very basic terms:

• Annual fee: What you will be charged every year for using the privileges of the card.
• Annual Percentage Rate (APR): The interest rate that you’ll be charged if you don’t pay the minimum monthly payments. However, often credit cards have different APRs for purchases.
• Introductory APR: A low introductory APR that goes up with time.
• Balance Transfer Fee: A fee charged to transfer balances from one credit card to another.
• Cash Advance Fee: Cash Advances mean availing cash or taking out a loan on your line of credit. They can become a bailout package while during emergencies, but can be harmful if you don’t repay on time.
• Late Payment Fee: A fee charged if you pay off the loan after the due date.
• Minimum Interest Charge: A fee that is imposed as you carry forward a balance.

Know “credit score”
Your credit score is a significant number that helps financial institutions determine your creditworthiness – how likely you are to repay your debts. Each time you apply for, use, and miss a payment on an existing loan, you manage to build an entry on your credit file that, in a way, either raises or lowers your credit score. So to establish a good credit score:

• Limit the number of plastic cards you use
• Make sure you make the payments on time
• Don’t max out your credit limit
• Never run up the balance on your card
• Try to pay off the balances instead of transferring them
• Check your credit score once a year to keep it error free

You are eligible to avail a free credit report every year from each of the three credit reporting agencies. Visit annualcreditreport.com to get yours.

Know the tools to stay out of credit problems

There are some cards that offer you free, automatic email alerts and other available means so that you can keep track of:

• Balances
• Available credit
• Payment history
• Payment due dates
• Payment activities

Some cards offer free, automatic email alerts as well as online access that help you keep track of:

• Available credit
• Balances
• Payment due dates
• Payment history
• Purchase activity

These were some of the tips for you so that you can know about credit before you go out to get a brand new credit card.