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[G377]Good Credit Credit Cards

by James Exum, Jam

One good method is to get a credit card that is used only for their purchases - and whose payments are made from their budget / allowance.

Begin by doing the research together - look at the different credit card offers, consider the benefits of each, such as interest rate, reward offered, and any annual fees.

Since you will be monitoring this use and hopefully keeping purchases to a minimum, a card with an annual fee in exchange for rewards would be a poor choice. However, show your child the math before rejecting that card.

Compare the cards offered to a person with a high credit score vs. a person with a low credit score, so that the benefit of maintaining high credit stands out in black and white.

Next, have your child assist you in filling out the application. Let him or her learn what information is required.

As you wait for your new card to arrive, work with your son or daughter to set up a budget for its use. Show him that if the budget / allowance for the month is $20 and he spends only $20, he can pay the bill in full when it arrives and pay no interest.

However, if she charges $40 instead, it will take 2 months to pay the principle and she'll still owe interest - which will have to come out of her budget for the 3rd month.

At the same time, you can and should set up a savings account, and encourage your child to put any unused money for the month into that account. That will give you the opportunity to teach how interest can be a benefit when it becomes a credit to your account rather than a drain on your funds.

Since consumers are right now drowning in debt, and since interest and penalties are making their debts double and triple, teaching kids to plan ahead and wait to make a major purchase could be one of the most beneficial lessons you teach as a parent.

So consider that your son wants a new "toy" that costs $100. Show him how putting that $20 into a savings account and making the purchase after 5 months will leave him with money left over, while making that $100 purchase now and paying $20 per month will leave him still owing interest after the original $100 has been paid.

Knowing what is right and what is wrong helps you in life and knowing what is right and wrong in building good credit takes practice as well. You don't start with a perfect credit score and then your actions will determine if you can keep your good score or not. You actual have to “build” your credit. This takes practice and knows what types of actions help and what types of actions hurt your credit score.

Having a good credit score is something that everyone is striving for, but for most Americans don't have a good credit score (above 720). The average American has a score of about 620 and this puts them in the “Fair” category. There are several things that you can do to help you maintain a good credit score, or if you have a score below 720, you can work to build (or repair) your credit.

Here are some tips to help you build or repair your credit. You do not have to hire someone to help you repair your credit, but it some cases, it may help.

1. The most important rule to building or repairing your credit is to never (again) spend more than what you can pay back. This sounds like a simple rule but often is the one that most Americans can not follow. With credit cards, most Americans find themselves in a position of being able to buy items that they normally could not afford. Even if you can afford the minimum payments, you are setting yourself up for a huge financial fall. You can also harm your credit if you don't follow all of the “rules” that your credit card provider has given you to follow.

2. The next simple rule is to pay your bills on time and at least the minimum amount due. Again, sounds simple but most Americans can't seem to follow this rule all of the time. One late payment really hurts your credit score and takes a long time to repair. It is best to pay off your credit card balance each month, but most Americans don't (or can't) do that. But if you work to pay more than the minimum payment amount each month, you will be working for a better financial future. Saving your credit for other things such as an unexpected car repair is better than using your credit to buy this weeks groceries.

3. If you have a credit card, then never exceed your credit limit. You are spending your future income, not your extra money that you have available. Remember credit is your commitment to repay money that you are borrowing (not money that you have).

4. Finally, be responsible for your finances. Keep your paperwork secure and well-organized. Never give out your personal financial information to someone that you have not verified their intentions. Identity theft has often been perpetrated by friends who see an opportunity to use your “good” credit. Many people think that this is a victimless crime but in actuality, you may not be physically hurt but the damage often can't be repaired and will only be fixed when it falls off your credit report in 7 years.

Building good credit takes practice and you can start today by following good habits.

Article Source : Disadvantages Of Using Credit Cards

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Both James Exum & Rob Holland are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

James Exum has sinced written about articles on various topics from Credit Cards, Gas Prices and Credit Cards. BestRateForCreditCards.com is your on-line resource for comparsions. James Exum's top article generates over 8100 views. to your Favourites.

Rob Holland has sinced written about articles on various topics from Credit Cards, Debt Reductions and Finances. Ovation Credit Services is a premiere provider of and credit report repair services. We've helped more than twenty thousand consumers correct their credit. Rob Holland's top article generates over 6600 views. to your Favourites.