5 Smart Credit Moves

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If you utilize smart credit moves, you can maintain your credit level and avoid any problems along the way. Here are a view of the best smart credit moves that you could potentially try.

1. Balance Transfers

If you are like the majority of Americans, you have some balances on credit cards. Instead of allowing these balances to sit on your card, you might want to consider transferring them to a low interest credit card. There are many credit cards out there that will provide you with a zero percent interest rate for an introductory period. In many cases, you can get 12 to 18 months of no interest. Therefore, you could potentially transfer a credit card balance of thousands of dollars that has a 20 percent interest rate over to a card that has no interest. This could save you quite a bit of money over the course of the year and it will allow you to pay down your balance quicker.

2. Backup Cards

It might be a good idea for you to carry at least one backup credit card at all times. Credit cards can be very unpredictable and it can be helpful to have a backup card to make purchases with. For example, a credit card company could reduce your limit without letting you know. If you are trying to make a purchase, this can be a major problem for you if your credit card gets declined. If you carry a backup credit card, you could simply pull it out of your wallet or purse and make the purchase. It is important that you do not rack up balances on your backup card.

3. Charging a Small Amount on Old Cards

If you have old credit cards that you do not use anymore, you might want to consider charging a small amount on them occasionally. Some people close out their old credit cards, but this is not good for your credit score. You need to keep your oldest credit cards open as long as possible. Therefore, you might want to make a small purchase occasionally so that you do not have to pay any dormant fees on them. 

4. Making Too Many Changes

Even though it can be tempting, you do not want to make too many changes in a short amount of time. For example, if you close out several credit card accounts and open new credit cards, this can negatively impact your credit score. If you are trying to get a loan during this time period, you will potentially be declined. Instead, just keep your old credit cards open and avoid any problems.

5. Paying More Than the Minimum

You will have the option to pay only the minimum payment on your credit card each month. If you want to ever pay off the balance, you will want to commit to making more than the minimum payment. This way, you can pay off the interest that is accumulating and some of the principal.