In the months following the holidays, many companies are offering numerous credit card deals.
You can achieve a good credit rating by managing your credit cards well and avoiding some
costly credit card mistakes

1. Focusing on freebies
It may be time to rethink if you should get that credit card because of the exciting rewards it
offers. The card itself should be a good deal, not just the freebies. You can tell if the card is great
based on interest rates and its terms and conditions. At the end of the day, it’s pointless to get
free reward points when you’re paying high interest rates and annual fees.

2. Don’t overspend
Keep your credit card debt less than 10% of your available credit. Spending too much is an easy
way to ruin your credit rating. Aim for the highest score range of 760 to 850.
The more credit card debt you have, the more your credit rating is negatively impacted. Aim to
use less than 50% of your credit limit. For example, if your card has $5000 limit, aim to use less
than $2500. You could face higher interest rates if your banks and credit card companies notice
irregular repayment patterns.

3. Closing Old Accounts
A popular myth says that if you close an old account, you may increase your credit score. This is
false and the opposite usually occurs because closing an account can delete parts of your credit
history. 15% of your credit score is based on the length of your credit history.

4. Don’t Accept the Wrong Credit Cards
No matter how desperate you are, don’t accept cards with high interest rates and high fees. Some
subprime cards have as high as 25% interest rates, with only a $500 credit limit.

Secured credit cards can be a good option for people trying to build or increase their credit score.
Start small, and deposit cash into the secured card. Pay back your bills in time, and better credit
card offers will eventually come your way. Beware of that department store credit card, because
the store discount may end up costing you more money with high interest rates of 21% or more.
Applying for department store credit cards can create inquiries on your credit report which can
lower your credit scores.

5. Transferring Balances
Transfer balances the right way. Do not close old account and do not max our spending on a new
card because this will hurt your credit score. Also know what fees may be incurred in the balance
transfer process and expiry dates of promotional offers. Also try to limit transfer to once or twice
every 12-18 months.