How well do you know your credit cards?

The Denver Post - - BUSINESS -

Here are some com­mon ques­tions and an­swers about credit card ba­sics.

Credit scores: Us­ing a credit card has an im­pact on two of the big­gest fac­tors in your credit score: credit uti­liza­tion and pay­ment his­tory.

• Uti­liza­tion is the per­cent­age of avail­able credit cur­rently used. Uti­liza­tion tends to have a neg­a­tive im­pact on credit scores once it passes 30 per­cent.

• Late or missed pay­ments can put a dent in your credit score.

Credit re­ports: Most big card is­suers re­port ac­count ac­tiv­ity to the three ma­jor credit bu­reaus — Ex­pe­rian, Equifax and Tran­sunion — ev­ery month. But some card is­suers re­port only to one or two, or even none. If you’re try­ing to build credit, get a card that re­ports to all three.

‘No in­ter­est’: Pro­mo­tional lan­guage such as “no in­ter­est for 12 months” of­ten hides the fact that in­ter­est is ac­cru­ing on a pur­chase. In­ter­est can be charged on the en­tire amount, go­ing back to the time of the pur­chase, if any bal­ance is left at the end of the pro­mo­tion.

Clos­ing a card: Clos­ing an ac­count low­ers the amount of credit you have avail­able, which can in­crease credit uti­liza­tion — and pos­si­bly hurt your credit score. If a card doesn’t charge an an­nual fee, you may be bet­ter off leav­ing the ac­count open and mak­ing the oc­ca­sional pur­chase with it to keep it ac­tive. — Nerd­wal­let

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