Want to create credit using cards, but worried about getting into debt? Try this trick
Credit Cards Can Bring Huge Benefits – earn rewards is obvious. After all, when card issuers give you miles, points, or merchandise to buy things you’d buy anyway, it might seem odd to let that go.
And if free travel, money or goods are not enough, credit card can also play a very important role in helping to improve your credit score. The scoring formula takes your use of credit (the amount of credit used versus what is available to you) on account, as well as your combination of different lines of credit and your payment history. Having credit cards helps with all of this.
Despite these advantages, some people don’t like the idea of using credit cards because of the risk of getting into debt. And for people who really have a hard time controlling their spending or knowing if they overcharged too much to pay, credit cards can indeed be dangerous.
The good news is, if you’re nervous about your ability to use credit cards responsibly, there is a simple trick you can try to take advantage of mortgage credit cards without risking yourself. above your head. with bills you can’t pay.
Could this simple credit card trick work for you?
This is how it works:
- Sign up for a credit card, if you don’t already have one. Look for a card with no annual fee and don’t worry about the rewards because you won’t earn much.
- Set up automatic payment to the credit card for one of your recurring bills. For example, you can set up automatic payment for a streaming service that you use to watch movies and TV shows or for your cell phone bill.
- Set up automatic payments from your bank account to your credit card each month.
With this trick, you will get a small, predictable charge on your card every month. Then your statement will come and your balance will automatically be paid in full. Your low credit utilization rate and on-time payments will be reported to the three major credit bureaus, and you will begin to build a strong credit history.
You don’t even have to keep the card after you’ve done that – you can stick it in a drawer or even cut it out so you won’t be tempted to use it. Just make sure to log into your account every now and then to make sure payments are processed correctly and the bill is paid on time through your automatic withdrawals.
This trick works great because you don’t need to carry a balance to build up credit, or charge a lot. You’ll enjoy all the benefits of making regular, predictable payments without the risk of borrowing too much or missing a payment in error.
Of course, you won’t get the other perks that the cards offer, such as rewards or purchase protections. But if you think that using cards will lead you to get into debt, then forfeiting these benefits doesn’t matter because the credit card interest the fees you would have owed would eclipse the value of any rewards or cardholder benefits.
Only you can know if you are able to use credit responsibly. But the good news is that with this trick, if you’re unsure of your ability to do so, you don’t have to give up the credit power that cards offer.
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