How to Preserve Your Good Credit Card Ratings
You may think that because your statement just arrived, you have a few days before you need to deal with it. Until the new regulations go into effect, that’s not necessarily true.
After July of 2010, credit card issuers will be required to send your bill 3 weeks ahead of the due date, giving you plenty of time to get your payment in before the deadline. But right now, that bill could be due just a few days from the time it lands in your mailbox.
So open the bill the day it arrives, and if it looks like there’s not time to get postal delivery by the due date, pay on line. This can also be tricky, because if you read the fine print, some card issuers require your on line payment to be made by a specific time of day. For instance, your bill may be due on July 3, so you assume you have until midnight – but the fine print clearly states that the payment must be made by 3 p.m. Eastern Standard Time. If you pay at 3:15 – you’re late!
Most card issuers do give you the option to schedule your payment ahead of time, so if you’re apt to forget on the due date, enter your payment ahead of time and schedule it for the due date. Be sure to write the deduction in your checkbook on the date you entered the payment. Don’t wait for the due date, or you may “forget” and spend the money that’s already spoken for!
Rule #2 – Never, ever, go over limit.
You’ve read that to preserve the highest possible FICO scores you must never exceed 30% of your available credit. Some experts say not to exceed 10% – but sometimes life happens. If the transmission goes out of your car, you go ahead and exceed the 30% because without the car you wouldn’t get to work – and wouldn’t have money to pay any bills.
This is the second reason to read your mail – carefully.
Panicked credit card issuers are lowering credit limits on cards and raising interest rates – even for some of their best customers. That means, unless you read everything you receive from your card issuer, you might think your credit limit is $5,000 when it has actually been reduced to $2,000.
So every time you receive a credit card statement, open it that day and look at the due date, the credit limit, the available credit, and your interest rate.
Going over limit not only costs you money in fees, it almost guarantees a large hike in your interest rate, and harms your FICO scores - so take the extra minute to read that statement.
