Although there was nothing that stood out about credit cards in 2016, there were some interesting developments nonetheless. For example, a wide range of financial institutions pushed out a wider range of financial products for the sake of appealing to a wider range of customers, which in turn, encouraged other financial institutions to fine-tune their existing financial products for the purpose of focusing on their particular niches.
Furthermore, credit cards became even more integrated with mobile payment providers, which suggests that they won’t be replaced by mobile wallet solutions anytime soon but will instead become part of the shift towards mobile. Finally, it is interesting to note that credit card companies have been keeping a close eye for delinquencies, which is a sign of smart and sensible caution in response to economic issues that may or may not flare up into serious problems. Summed up, 2016 proved to be a more interesting time for credit cards than it seemed, while 2017 promises to be no less so in time still to come.
Here are 10 useful credit card tips for 2017:
1. Be Patient with the Rollout of Chip-Based Credit Cards
Chip-based credit cards are being pushed for the sake of not just increased convenience but also increased security. As a result, credit card holders should keep a close eye on their roll-out, though they should know that it is proving to be slower than expected.
2. Watch Out for Skimmers
Criminals have been known to install skimmers on credit card readers in order to steal information. To protect themselves, credit card holders should either use cash when they are suspicious or use their credit cards rather than their debit cards because they won’t be held responsible for fraudulent payments.
3. Check Statements
With that said, even if credit card holders are careful with the use of their credit cards, they should still check their credit card statements whenever they come in. After all, there is no such thing as fool-proof security, meaning that it never hurts to keep a close eye on credit card use.
4. Check Credit Reports
On a related note, credit card holders should keep a close eye on their credit reports as well because their credit scores can have enormous consequences for their ability to borrow and make other use of financial products. By keeping a close eye on their credit scores, they can make sure that no false events are reported as well as make sure that no one has stolen their personal information, which has become easier than ever in the Digital Age.
5. Freeze Credit
This is a little-known fact, but it is possible for people to tell the major credit bureaus to freeze their credit, meaning that no one will be able to take a look at it. As a result, this should stop people from using their personal information to submit applications for new forms of credit, thus reducing their chances of being victimized in this manner to next-to-nothing because most lenders will look at credit scores as their main source of information when gauging someone’s creditworthiness.
6. Mobile Alerts
One way that people can keep a close eye on their credit cards is to set up mobile alerts for whenever they meet certain criteria. For example, some people like to be alerted whenever their credit cards have been used, while other people like to be alerted whenever their issuer notices something suspicious. In the end, credit card holders should set up alerts in a way that works for them rather than others.
7. Ask for Credit Raise
A higher credit limit means the ability to borrow more money, which can prove rather useful for people who make frequent use of their credit cards. As a result, credit card holders should consider asking their issuers for a credit raise, which is more often approved than not. What is most interesting about this is that getting a credit raise can actually improve someone’s credit score by lowering the ratio of their existing debt to their available credit, though of course, this will only hold true so long as they don’t make use of that additional credit.
8. Credit Utilization Is 30 Percent of the FICO Score
In most cases, credit score is calculated using FICO. Under FICO, 30 percent of the weight is assigned to credit utilization, which means how much of their available credit that a financial customers has used as debt. This means that people who carry a balance on their credit cards from period to period can expect their credit score to suffer with all associated consequences. Something that is particularly true if their balance is close to their credit limit. For people who are planning to apply for new financial products, this is something that they should take under serious consideration for paying down their existing balance can have a dramatic impact on the outcome of such applications.
9. Rewards Cards Can Be Rewarding
As mentioned, financial institutions are offering a wider range of financial products, including a better selection of rewards cards. As a result, people should check out the rewards attached to the credit cards that are available to them, which could provide them with increased benefits compared to what they are holding onto at the moment. With that said, people who pay off their balances are the ones who will benefit the most from rewards cards because such credit cards tend to have higher interest rates, meaning that they are not equally beneficial to all of the people out there.
10. Pay Off High-Interest Debt First
As always, the debt with the highest interest is the debt that should be paid off as soon as possible. This is because paying them off increases the financial customer’s ability to pay their debts by reducing their interest payments in each period, thus enabling them to do so faster and faster. This is particularly true for people who are close to their credit limit because a sudden rate increase could cause problems that could be averted by being smarter with their repayments now.