When we get in credit repair, the subject of credit cards becomes a bit more touchy. As we try to repair our credit, we have the feeling that our every move is under scrutiny... and they indeed they might be. Once in credit repair, creditors will start to be more careful with each of your new applications for credit, and bad management of your credit cards in your possession could potentially lead to a series of refusals for new credit. In order for that not to happen, we’ve put together a few guidelines concerning credit cards that you should definitely think about follow during your credit repair.
Don’t just blindly apply to the credit card offers you get. Read all the conditions and terms and really try to figure out if that offer is right for you. Be it the fees that you will pay, the interest rates you will deal with when you load it a little too much, or the rewards that you gather as you use it, those will all impact your credit repair situation. And maybe more importantly, don’t try to apply to offers that were clearly not made for your situation. Each credit card type has its targeted user, and you might want to go on the web to analyze each and every option instead of jumping on to any opportunity you get through the mail.
Use credit for what it was meant for, and that is occasional use. If you constantly use the card at the grocery store, you’re not really getting the message. In terms of habits leading to debt and credit repair, this has to be the one that can take you out the quickest. If you pull out the credit card instead of looking at the budget, you will get some nasty surprises in no more than 30 days.
Don’t always settle for the minimum payment asked in order to potentially buy more things. Keep your balance down and not anywhere near your limit. This will improve your credit score and keep your credit report in a good state. If you can’t pay the whole balance, still make generous payments and transfer only a reasonable amount to the next bill, allowing you another full month before you pay – but don’t make this the habit.
Big one-time purchases
Another move that can take you out when it comes to credit repair is when you make a big one-time purchase you can't afford. Even when you have a tempting offer on the table, if it's too big for you to afford, don't take it. Don't count on the fact that you will have 30 days “to find the money”, because if you don't, your credit repair will take a massive hit. Stick to smaller purchases on your credit card, even if your limit is high.
And finally, if you choose to close a card, don't go too fast. A lot of the time, we want to do it immediately before we change our minds, but try to consider what it would do to your credit first. Your credit score can go down if the outstanding balance is too high. Credit repair is about managing the situation and not about closing all your doors on the world of credit forever. You can keep your cards as long as you don't apply blindly to everything, make generous payments and avoid big one-time purchases.