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How to Manage Your Credit Card

In terms of your overall credit health, using your credit card responsibly is a great way to build your credit rating. Luma offers these basic tips to help you better manage your credit card.

Think Small

When it comes to using your credit card, thinking small is better than thinking big. For many reasons, credit cards are often not the best way to borrow money for large purchases. If you make a small charge or two every month and pay your balance in full, however, you’ll soon establish a solid credit history and avoid owing a large amount that’s hard to manage.

Go Lower than Your Limit

When you get a credit card, you’ll receive a credit limit— the most you can charge using your credit card. Avoid getting close to this limit, as it’s all too easy to go over it, particularly when interest charges are applied. If you go over your credit limit, additional fees often apply so you’ll pay extra if you exceed your limit.

Pay Your Balance in Full

Whenever possible, paying off your card balance in full each month is the smartest way to use your card. By paying your credit card balance in full, you generally won’t pay additional interest charges and you won’t get close to your credit limit. Even if it’s a financial stretch to pay your balance in full, try to do so as much as possible so you don’t pay more over time than you need to.

Do More than the Minimum

Each month, it’s important that you make the minimum repayment on your credit card. However, when possible, you should try to pay more. This helps you build a positive credit record and payment history. Doing this will also mean that you pay off what you owe on the card more quickly – and that reduces the amount of interest you end up paying over time.

Set Up a Direct Debit

If you do carry a balance, direct debits are the most reliable way to make sure your credit card payments are always on time. Paying on time is vital in building your credit history. Just set up a monthly direct debit for your minimum repayment or a larger fixed amount. A direct debit will mean you don’t have to worry about remembering payment dates and won’t get hit by fees for paying late.

Manage Your Account Online

Luma cardholders benefit from online account management, so you’ll get statements and other information online. Not only is this very secure (often more secure than paper documents), but it also helps you stay on top of your finances with email alerts when you’re nearing your credit limit or if your credit card issuer suspects there’s fraudulent activity on your account.

Talk About Payment Troubles

If you ever run into difficulties making your payment, be sure to contact your provider straight away. Your credit card provider will help you explore payment options that do less damage to your credit history in the long run.

By following these tips and using your Luma card responsibly, you’ll better manage your credit and be well on your way to building it.