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Because having good credit is so important these days, many individuals are wondering how to get credit for the first time.  Getting credit for the first time can be difficult, depending on the actions that you have performed prior to applying for credit.  In the world of credit reports and frequently updated credit scores, even small mistakes can have a large impact on your credit history which affects your ability to obtain credit in the future.  In fact, many people have already done things that had an impact on their credit history before ever applying for a credit card or a loan.  There are things that you can do to improve your chances of getting credit for the first time and following these tips may allow you to obtain a lower interest rate for your credit products as well.

The Importance Of A Good Payment History

When attempting to get credit for the first time, it is important to remember that every payment that you make on accounts has the ability to affect your credit history.  Even if you have never applied for credit from a lender or a bank, a credit history is still being created which details some of the choices that you have made.  Late or missed payments can have a great impact on your credit history and may stay on your records for as long as seven years.  Maintaining a good payment history is very important when getting credit for the first time.

Finding A Co-Signer

Another important tip for getting credit for the first time is to “piggyback” on someone else’s credit until you are able to establish your own credit.  This technique works by having a person with established credit and a good credit history co-sign for a loan or a credit card, allowing you to obtain credit to begin establishing your own credit history.  The person that co-signs the loan for you should be some one that you can trust and that knows that they can trust you, like a parent, a grandparent, or other close family member.

Obtaining a co-signer to help you obtain a credit card or loan is one of the fastest ways to obtain a credit history, but there are some risks involved with the technique as well.  If the person chosen as a co-signer has had credit problems in the past, then they may not be able to help you get a lower interest rate than you would have qualified for on your own.  Another danger with this method is the fact that any mistakes that you make when using the credit card, such as missing a payment or paying late, will be reflected in the co-signer’s credit report and may create a reduction in their credit score.

Getting credit for the first time does not have to be a difficult task, but there are a number of different ways that can be used to make the process easier.  By remembering that virtually any transaction that you make has the potential to affect your credit score, you will insure that your credit history is positive, which will make it easier for you to get the credit products that you desire.

When a person has been a victim of credit card theft, often their first indication of the violation is charges that cannot be explained appearing on their credit card statement.  Without knowing the proper way to dispute these charges, the victim may be held liable for these charges and will end up paying for items that criminals have purchased using their credit card number.  Most credit card companies have policies that state that the victim will not be responsible for charges made on their credit card due to criminal usage, but the charges will only be dismissed if the person knows how to properly dispute the charges.

Review Your Records

If a credit card charge that is not familiar shows up on your credit card statement, the first thing that the person should do is review their records to determine whether they may have forgotten that they have made the charge.  There is nothing more embarrassing than attempting to dispute an unauthorized charge and realizing that you were actually the one that made the purchase.  People that use their credit cards on a regular basis should especially be careful because it is very easy to forget about a charge or miss identifying a charge that shouldn’t be there.

Inform The Credit Card Company Of The Charge

If a charge that cannot be explained does appear on your credit card statement, it is important to inform the credit card company of the unauthorized charge as quickly as possible.  In many cases, the charge that is made on the credit card without your consent will be one with a high dollar value as the thief tries to obtain as much as they can from the account as quickly as they can before their actions are noticed.  If the credit card has only been used for purchases less than $100 in the past and all of a sudden a $600 charge on the credit card appears, this is a good indication to the credit card company that the purchase may have been fraudulent.

The faster the charge is reported to the credit card company, the easier the charge will be to remove from the account and the better chance the company will have of finding the thief and prosecuting them.  If more than a few days has passed since the charge to the account has been made, the credit card company may require that you send them a written statement attesting to the fact that you did not make the charge and that you do not know who charged the purchase to your account.  These written statements often have to include permission for the company to prosecute whichever person is found to have used the credit card or credit card number to make the purchase. 

Keeping Track Of The Issue

After the credit card company has been contacted about the unauthorized charges on the credit card account, it is important for you to continue to monitor the situation to make sure that it is taken care of.  You should save the credit card statement that includes the unauthorized charge until the next credit card statement arrives so that you can make sure that the charge has been taken off of the account and the account balance has been corrected.  If you have online access to your credit card account, you may want to monitor the account online to make sure that the representative at the credit card company has taken care of the problem.

In recent years, more and more people have begun to use their credit cards for everyday purchases instead of using their credit cards for special purposes.  Commercials have been running for years trying to encourage people to use their credit cards for everyday purchases and many credit card companies have begun to offer rewards for using the credit card at the grocery store or the gas station.  Credit card companies are willing to spend the money on advertising this because the more people use their credit cards, the more opportunities that the credit card company has to earn interest and apply finance charges to the purchases that have been made.

Always Pay Off Your Credit Card Balance

There are a number of ways that a consumer can use to reduce the amount of money that they are paying to the credit card companies each month and the most effective way is to pay off the balance of the credit card each month.  Under the law, the credit card companies must give the person a grace period of at least 25 days to pay off the purchases that have been placed on the credit card before the balance of the card is subjected to interest and finance charges.  If the balance that has been placed on the credit card is paid off within that time limit, then the company cannot charge the person for placing the purchases on the credit card and the person gets a 25 to 30 day loan for free.

Use The Credit Card Sparingly

Although the temptation to place a majority of your purchases on your credit card and forget about them can be very high, going this route will cost the person a great amount of money in the long run.  In addition to the interest charges and finance charges, there is a good chance that the person will spend more with the credit card than they can afford to pay, will go over their credit limit triggering an over limit charge, or will carry a balance on the card which allows the company to charge higher fees for using the credit card.  The best way to use a credit card is to only use the credit card for emergency purchases and to pay cash for everything else.

Pay The Bill As Soon As It Arrives

A significant percentage of the profits that credit card companies bring in each month are due to the number of accounts that they have charged a late payment charge to.  These late payment charges can range anywhere from $25 to $39 per occurrence and are charged directly to the account, which will add to the balance amount that the person will be paying interest on.  In some cases, the late payment charge causes the person to go over their credit limit which can trigger another charge of up to $39 which will also be added to the balance of the credit card.  By paying the credit card bill as soon as it arrives, you will ensure that you will not forget about making the payment and the payment will not be mailed so late that the deadline is missed due to the pickup and delivery of the mail.

Identity theft is a very difficult experience because it can take years to repair the damage caused by the theft and there is no way to be sure that the person will not be victimized again.  Knowing how to report identity theft and how to obtain a free credit report can help provide the person that has been victimized with peace of mind after the crime and may even lead to the prosecution of the criminal that has stolen the person’s identity.  The method for reporting identity theft properly is easy to understand and can be accomplished fairly quickly, but it does take time to correct all of the information that has been compromised and solve all of the problems that the identity theft can cause.

Steps For Reporting Identity Theft Properly

If the person reviews their credit report and finds that they have been the victim of identity theft, it is important that they know how to report the identity theft properly to limit their accountability for the charges that have been incurred.  First, the credit card company should be notified that a fraudulent account has been opened.  A request should be made that the company close the account immediately and flag wherever the account has been used to aid law enforcement in finding the criminal that has opened the account. 

Next, a police report should be made of the theft so that law enforcement is aware of the theft and the criminal can be prosecuted with criminal charges once they have been found.  The final step is to contact the credit reporting bureaus to alert them to the identity theft and let them know what accounts are in question so that they can be removed from their credit report and monitored for further action.  Following these steps quickly after the questionable accounts have been found can ensure that these accounts are closed quickly before they can cause more damage to the person’s credit history and credit score.

Why Is Knowing The Proper Method So Important?

Knowing the proper way to report identity theft is important so that the person can regain their identity quickly and limit while minimizing the number of problems caused to the person’s credit history.  The first thing that typically occurs in an identity theft is a credit card obtained using the person’s personal information and many things are charged to the credit card as quickly as possible.  These credit cards are used for a very short time period and then the thief gets rid of the credit card and all of the information associated with the card.  This reduces the likelihood of the criminal being caught with incriminating information and reduces the case against them when they are finally caught. 

Every person should review their credit report on a regular basis to make sure that there is nothing on the credit report to indicate that the person has become a victim of identity theft.  Often, the first indication that a person will have that they have been a victim of identity theft is that they obtain a current credit report and find an account or several different accounts that they do not remember opening.  The person will never receive any statements from the credit accounts that have been opened because the criminal will use a dummy address to prevent the victim from being alerted.  Knowing the proper way to report identity theft allows the person to report anything abnormal on their credit report in a timely fashion to give the law enforcement a better chance of catching the criminal.

There are many credit card mistakes that people can make that lower their credit score and reduce their ability to obtain credit.  Many of these common mistakes are things that most people do not think of as affecting their credit score.  The truth is that there are many things that can reduce their credit score from actions that they may think are benign.  People that avoid the common credit card mistakes keep their credit score high and the interest rate for their credit accounts low.

Missed Payments
The most common mistake that many people make is believing that a missed payment on their credit card will not have an affect on their credit.  Some people believe that the only consequence is a penalty fee and most are willing to accept the fee to so that they do not have to pay the minimum payment due for the credit card.  What they don’t understand is a missed payment will also show up on their credit report and has the ability to lower their credit score significantly. 

Not Securing Personal Information
Another common mistake many people make is not keeping their credit card information secure.  There are thousands of scam artists and thieves using tricks designed to get a credit card account number or security code for the credit card.  This is all that criminal needs to make purchases on the internet and have the items delivered to a different location.  These mistakes are common when people are distracted or not paying attention to what they are saying to a person that they do not know.  Often, the person will not even know that their credit card has been used until they receive their credit card statement and find charges that they have not made. 

Carrying Balances
When using a credit card, the person should only charge what they are able to pay off each month.  Paying off the balance each month allows the person to save a lot of money in interest payments and finance charges.   This also demonstrates to the credit card company that the person knows how to use credit responsibly, making them more credit worthy and increasing the chance that they will be approved for credit line increases and other types of loans. 

Maxing Out The Credit Card
Another common credit card mistake is to use most or all of their available credit.  People that use over 30% of their available credit are considered to be a credit risk by the credit card companies.  Credit card companies base their decisions on who to extend credit to on formulas that do not take anything but statistics into consideration.  In recent years, there have been many people that were not approved for loans, mortgages, or credit cards because they had used too much of their available credit.

Making mistakes when using your credit cards can end up costing you a lot of money in the long run so it is important to avoid making these common credit card mistakes.

The amount of profit that credit card companies have made off of credit card late fees has reached record levels in the last few years as more and more individuals find themselves unable to make their payment on time.  Credit card fees are destroying family budgets by adding additional charges to the credit card, making it more difficult to pay off and causing the payment of more interest to the credit card company.  Making a payment late can affect a person in a number of ways as well, such as a rise in the interest rate for the credit card, less credit available on the credit card, and a negative entry on the person’s credit history.

Many credit card companies have increased the fees for a late payment by a significant amount over the last several years.  In the 1980’s, the late payment penalty may have been $10 at most credit card companies, but now, the fee for making a late payment on a credit card is close $40 for any credit card company.   If your payment is late, you will be paying the credit card company a large amount of money that you are getting no benefit from.

How Can I Avoid A Late Fee?

There are many ways to avoid having to pay a late fee to the credit card company.  One of the easiest ways to prevent these charged is to pay your credit card bill as soon as it arrives in the mail each month.  By not waiting until the last minute to make the payment, you make sure that the due date for the payment does not slip your mind, triggering a late fee.

Another way that you can use to avoid credit card late fees is to post reminders in prominent places to pay your credit card payment on time.  Notes on your calendar or an alert on your PDA can warn you that the day is approaching that you will need to make your credit card payment.  This will serve as visual cue to check the balance in your bank account and mail the check to pay the bill. 

Many credit card companies have multiple ways for their customers to make their payments and some can be useful if you have forgotten to mail off your payment.  Other methods of paying your credit card include payment by telephone, which involves talking to a customer service representative, and making a payment on the credit card company’s website.  Credit card late fees account for a significant portion of the fees charged by credit card companies, giving the credit card company free money out of your pocket by paying your credit card bills a day or more late.

Over the last several years, many credit card issuers have begun to issue credit cards that offer travel rewards to the people that are requesting them.  These travel rewards credit cards offer points for certain types of purchases that can be redeemed at a later date for discounted rates or travel vouchers for hotels, airfare, cruises, or rental cars.  Many people wonder if the rewards offered by the credit cards are worth applying for the credit cards or if the rewards are only a ploy to get you to use the credit card because it will take a ridiculously long time to earn any rewards.

The Features Of The Credit Cards

Most travel rewards credit cards are amazingly similar in their features except for one thing and that is where the points earned on the credit cards can be redeemed.  Each of the credit cards will have similar interest rates for individuals with similar credit scores and most of them have no annual fee for using the credit card.  Because these credit cards are generally offered to people with good credit scores, there are no account maintenance fees or account set up fees for the credit cards.  The other fees that are charged to the credit card, such as over limit fees, late payment fees, and balance transfer fees, will typically conform to industry standards.

Different types of travel rewards credit cards will offer different point levels for different purchases.  Most of these credit cards will offer higher point levels for travel purchases, such as charging an airline ticket to the credit card, but will also offer points for general purchases as well, typically a point per dollar spent.  The amount of time that it takes to earn a reward with the points from the credit card will depend on how much you are charging to the credit card each month, how much you are paying off on the credit card each month, and what types of items you are charging to the credit card.

Redeeming Rewards

One of the biggest questions about whether a travel rewards credit card is worth applying for is how long would it take to earn a desirable reward from the points credited to the credit card.  For people that travel often and place a great deal of travel related charges on the credit card, they will earn points fairly quickly and be able to qualify for some of the better rewards.  People that use the credit card for more general purposes or do not place large charges on the credit card on a regular basis will find that it will take a very long time to earn enough points for the rewards and may become frustrated waiting for their points to accumulate.  If the person believes that the rewards are worth the amount that they will need to use the card, then applying for a travel rewards credit card may be a good idea for them because they can earn free travel and save money from purchases that they would have made anyway.

Over the last few years, more and more people have begun to express frustration with the way that credit card companies are handling their accounts and are angry with getting charged with fees for virtually everything that they do.  Credit card companies have dramatically increased the number of things that they will charge an additional fee for and have increased the amount of each of these charges to ensure that they will be making a healthy profit on the account regardless of the account balance or how often the person uses the credit card.  This has dramatically increased the average cost of using a credit card for most consumers.

So what are these charges and how to you avoid having to pay them?  There are a number of different types of charges that may be charged by the credit card company and tackling each of them will require a slightly different method.  The most important part of avoiding having to pay these charges is to learn how to recognize them and how to avoid triggering the charge.

1. Late Payment Charges
This is the most common charge facing consumers that use their credit cards to make purchases.  In order to increase the number of late payment charges that a credit card company takes in each year, many of them have shortened the number of days that the consumer has for making the payment, have charged the accounts for payments that are only hours late, and have increased the average late payment charge from $10 to $39. 

The easiest way to avoid having to pay a late payment charge is to make the payment for the credit card as soon as the new bill arrives and to make the payment with the credit card company’s website to eliminate the risk of the payment being lost in the mail.
 
2. Over The Limit Charges
This is another charge that commonly affects consumers.  If the amount of the balance on the credit card goes over the limit by even a single cent, the credit card company will charge the account an over the limit charge of $35 or more for each transaction that pushes the balance of the account over the line. 

To avoid having to pay an over the limit charge on your credit card, always know what your balance is on the card so that you know how much of your balance you have left to spend.  If you do not know if you have enough of a balance left to cover the transaction, err on the side of caution and check your balance before charging the purchase.

3. Account Management Charges
These charges are especially devious because many people are unaware that they will be paying these charges until they have already opened the account.  Account management charges can take on many forms, including annual fees, maintenance fees, account set up fees, program fees, and servicing fees.  Some credit card companies will only charge one of these additional charges while some others pile on as many charges as they can. 

The easiest way to avoid having to pay these charges is to carefully read the terms and conditions for the credit card before signing up for the credit card.  The terms and conditions for the credit card must disclose the additional charges that will be added to the credit card and knowing what credit cards charge these fees with make it much easier to avoid applying for those cards.

4. Transaction Charges
In many cases, the credit card company will charge the account an additional fee for certain types of transactions that are made with the credit card.  This will generally include additional fees for balance transfers and cash advances, but may also include fees for using the internet to pay your bill, for not placing a purchase on the account for awhile, and for being approved for a credit limit increase. 

These charges will be disclosed in the terms and conditions associated with the credit card along with the amounts that will be charged for each instance.  The best way to avoid having to pay one of these charges is to familiarize yourself with the actions that will trigger the charge and avoid those actions at all costs.

Over the last several years, a large number of people have decided to use a balance transfer credit card to reduce the amount of money that they are spending on their credit card expenses.  Many people use a balance transfer credit card for transferring large balances from a credit card with a high interest rate to a credit card with a lower interest rate.  Finding a balance transfer credit card that is right for you and your financial situation will not be difficult if you know what features indicate a good credit card for balance transfers. 

A Low Interest Rate For The Transferred Balance
The first item to look at when looking for a credit card for transferring a balance is the interest rate that the person will be paying for transferring the balance to the credit card.  Many credit cards that are offered as a balance transfer deal will have different interest rates applied to balance transfers and purchases.  If the interest rate charged for the transferred balance is significantly lower than the interest rate that will be charged for purchases, transferring the balance to the credit card could end up saving the person hundreds of dollars, as long as the person does not use all of the available credit on the credit card as well.

Favorable Terms And Conditions For The Credit Card
For any credit card, it is very important to read all of the terms and conditions so you know exactly what you are getting into when you sign up for the credit card.  The terms and conditions of the credit card will disclose what the interest rate for balance transfers will be and how long that interest rate will apply to the transferred balance.  For some credit cards, the issuer will offer a very low or 0% interest rate for balance transfers to the credit card for the first several months.  After this initial period, the balance remaining on the credit card is subject to a much higher interest rate.

Having the interest rate reset to a higher rate after the initial period is typically not an issue for the people that transfer smaller balances to the credit card or they are able to pay off the transferred balance before the initial period is over.  The problem occurs when people transfer a significant amount of money to the credit card and do not realize that their payment amount will increase when the balance is subject to the higher interest rate.  The amount that the interest rate increases has the ability to double or triple the minimum payment required for the credit card.

A Reasonable Interest Rate For New Purchases
There are a number of credit cards that advertise a low interest rate for the amount transferred to the credit card in the hopes that you will continue to use the credit card and place purchases on the credit card that will be subject to a higher interest rate.  These types of credit cards can result in significant savings as long as no purchases are placed on the credit card.  If purchases are charged to the credit card, no payments made on the credit card will be applied any purchases until you the transferred balance has been paid off.  This allows the issuer to charge the person the higher interest for the purchase for a long period of time.

There are 4 different credit card mistakes that people commonly make that lower their credit score, resulting in the person being less credit worthy to the credit card companies.  Most of the common credit card mistakes are items that many people would not even imagine affecting their credit score, but the reality is that there are many items that can influence your credit score that you may not be aware of.  If you can steer clear of the common credit card traps that millions of people fall into each year, you can keep your credit score elevated and the interest rates for your credit cards low.

Delinquent Payments
The most typical mistake that many people make when it comes to credit cards is to believe that a delinquent payment on their credit card is not important.  Some people think that the only consequence of a delinquent payment on their credit card is a penalty charge and are willing to pay the charge to avoid having to pay the minimum amount due on the credit card at that time.  These people do not realize that not paying a payment on time will also be reported on their credit report and will lower their credit score by a significant amount each time it occurs. 

Not Keeping Credit Card Information Secure
Another common mistake that many people make with their credit cards is to not keeping the information about their credit cards secure.  Preventing the information from being stolen by scam artists and thieves is simple as long as you are diligent about protecting your personal information.  These thieves know how to capitalize on common mistakes that people make when distracted or not paying attention to the information that they are giving out on the internet, on the phone, or by mail and can open many different credit accounts in a person’s name with a small amount of personal information disclosed.  It can take years to repair the damage that these thieves can do your credit score.

Not Paying Off The Balance Of The Credit Card
The best way to use your credit card is to only charge the amount that you are able to repay each month.  If you pay off the balance of your credit card each month, you will not only save a lot of money in interest payments but you will also raise your credit score by demonstrating that you know how to use credit responsibly.  The credit card companies may increase your credit limit so that you have more credit available if you need it because they know that you will repay them at an acceptable rate.

Maxing Out Credit Cards
Another common credit card mistake that many people make is to use most of their credit line or max out their credit cards.  Companies that issue credit card consider people that use more than 50% of their available credit to be a credit risk because the company assumes that the person is using their credit to extend their monthly salary and maintain their lifestyle and will not have the ability to pay the money back promptly because they are spending all of their salary plus more each month.  There have been many cases where a person was not allowed to take out a loan or an additional line of credit because they had used a more than 50% of their available credit and had been labeled as a credit risk by the credit card company.

Making mistakes with your credit cards can be an expensive proposition. Your credit score can be negatively impacted and your ability to increase your credit lines on your existing credit card offers can be hampered significantly. So if you’re in the market to make a with one of the better 0 APR credit cards available, make sure that you don’t make these common credit card mistakes.