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Choose the right credit cards to improve your credit score

His credit score it's a key indicator of your financial well-being and the risk you pose to lenders. The responsible use of a credit card with no credit history helps you get a foot in the door of good credit. To build a positive track record, pay your bills before the due date. Also, try to keep the balance less than 20% to 30% of the card's limit.

Becoming an authorized user on a parent's credit card with no credit history is a common way young people get started with credit. As long as the cardholder pays bills on time and keeps the utilization rate low, an authorized user should see a positive effect on their credit score.

Credit card issuers may be more lenient when evaluating the income and credit history of student card applicants. However, this leniency is generally not applied when evaluating the finances of applicants for Credit cards standard.

puntaje de crédito
Your credit score is a key indicator of your financial well-being and the risk you pose to lenders. (Photo: School Info)

How to improve your credit score!

Look for no-annuity credit cards that reward your spending patterns. If you buy a lot of gasoline, for example, a card that pays 5% cash back on fuel purchases will serve you well. 

If you're just getting started with credit (or are recovering from bankruptcy), a secured card is better. This type of product requires you to make a deposit as a guarantee. Thus, it can help you build a credit history and score. 

Cash back cards often allow you to use the rewards you've accumulated as statement credits for purchases. By doing this, your bill is reduced. A card that has an annual fee may be worth it. Still, first do the math to decide if the rewards you earn will exceed the fee.

Read Also:

Things to consider before taking out the credit card

Ways you can use your credit card to invest

Retailers can offer you attractive discounts if you sign up for credit cards without checking their store's desk. Also, retail cards are often easier to obtain than other cards. But keep in mind that both cards often have low credit limits. That means your credit utilization could easily exceed the 30%'s recommended mark when you use the card to make purchases.

As you learn the ropes, make a few basic purchases on a monthly basis, eg. Buy grocery items, to ensure you can pay the bill in full and avoid carrying a balance month to month, which earns interest. The percentage of available credit you use on your credit cards with no credit history is known as your credit utilization ratio, and the lower it is, the better your credit score.

Credit card fraud

Although in recent years they have seen the development of solutions in order to reduce the number of frauds in financial transactions. It is still possible to find ways to apply a scam. Since card transactions have instabilities that are exploited by offenders to commit crimes.

According to The True Cost of Fraud research conducted in Mexico in 2019, card transactions were responsible for a large part of the number of crimes related to financial transactions last year. Thus, this type of coup had a participation of forty-five and twenty-seven percent.

«Although PINs are essential to use cards at ATMs or point of sale terminals. In most cases, sales location mechanisms do not request the customer's PIN and companies are rarely validated. This is what the institution responsible for the research presents.

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Credit and debit card operations continue to have vulnerabilities that are exploited by criminals to commit fraud. (Photo: Internet)

Learn more about financial services fraud

Many commercial points identification is essential to make a financial transaction. Despite this, this procedure is only carried out when purchases exceed a stipulated amount. So, the standards are not enough to guarantee the safety of the customers and in many cases the safety standards are not properly followed.

So that a stolen card is susceptible to fraud. Add to that, a good part of the cards distributed by Mexican financial institutions use magnetic stripe technology. Which in turn facilitates the application of some strokes.

According to the study, the most common financial crimes related to cards are:

  • financial transactions without the obligation to show the card (such as online purchases);
  • credit or debit card cloning;
  • credit card lost and found by a scammer;
  • identity theft due to the use of an adulterated card.

Measures of the Mexican government

The investigation indicates that the Mexican government seeks solutions to make financial transactions more accessible to all citizens. This is the case in a country where more than 50% of citizens do not have access to banking services.

So the government is looking to create a digital payment system that will be managed by the central bank. And with this system, many Mexicans will have access to financial services in a simple and uncomplicated way.

According to the report, which included data from more than 80 companies dedicated to retail, e-commerce and financial services, fraud in Mexican territory represents approximately 2% of the annual profit of these companies in the last year.

Besides, the majority of the population continues to use traditional forms of payment. However, more applications and other means of payment are growing in Mexico, which in turn increases the risk of new frauds.

Also read:

Tips to keep credit cards always available

4 tips to use a credit card and pay your debts in the pandemic

Plan the use of your credit card and pay your debts during the quarantine it will give you advantages to face unforeseen expenses. The National Commission of Banks and Securities (CNBV) has communicated about the aid measures that financial institutions must use to support clients who have had a drop in their income due to the coronavirus pandemic.

Therefore, the announced actions imply the suspension of loan payments for a period of up to 4 months with the opportunity to postpone another 2 months, as announced by the CNBV. So if you plan to use your credit card during the pandemic, consider the following suggestions.

Planificar el uso de tu tarjeta de crédito y pagar tus deudas durante la cuarentena te dará ventajas para hacer frente a gastos imprevistos
Planning the use of your credit card and paying your debts during the quarantine will give you advantages to face unforeseen expenses (Photo: Internet).

How to use your credit card and pay your debts

What is your debt limit?

In this moment of uncertainty caused by the health crisis, and you need to know your debt limits, your credit card should not be seen as extra money. Experts recommend that people allocate no more than twenty to thirty percent of their monthly budget that way you won't compromise your budget. Also, consider not using more than fifty percent of your credit limit.

Check your interest rate

Your interest rate refers to the amount of your credit that will be the amount you will pay on your bill. If you think you won't be able to use your card without paying off your debts, try looking for another type of credit with a more advantageous interest rate.

What credit cards can be useful at this time of the pandemic?

Remember that credit cards are a means of making payments that allow a person to buy without having to have the money in hand, but they will have to pay the amount of the purchase on their invoice. However, as much as they bring advantages, it is important that you pay attention to the number of cards you have and which ones are worth keeping in this period of crisis. At times like the one we are experiencing now, cards can be excellent options to overcome emergencies and unforeseen events.

Plan your expenses

As we saw in the three previous topics and it is necessary that you know your purchasing power, do not forget to check the amount of interest that you will pay for your fatures. Remember that in a time of uncertainty it is necessary to plan your expenses so that you do not get into debt. In a way, ask yourself if all your spending is necessary.

The credits for which this support will apply to pay the debt They are housing with mortgage guarantee, revolving and non-revolving of natural persons (personal, of Credit cards, automotive credit, payroll, microcredits), credits of legal entities or individuals with business activity.

We hope this article has helped you rethink how to use your credit card and pay your debts.

Also read:

Ways to analyze your financial situation if you are employed

Food crisis: risk of hunger in 2020

The governments of Latin America must contain the health crisis of COVID-19. Alicia Bárcena is the Executive Secretary of the Economic Commission for Latin America and the Caribbean (Cepal). She pointed out, through a virtual conference, that 83.4 million people will face risk of a food crisis and hunger during 2020.

"We estimate that 16 million people will enter extreme poverty in the region, of which 10.7 million will be in urban areas and 5.7 million in rural areas," he said. Bárcena proposed the idea of delivering a bonus against hunger for six months. This to combat the problem of extreme poverty generated by COVID-19. "This bonus could be granted in the form of monetary transfers, baskets or food coupons to the entire population in a situation of extreme poverty."

In turn, Julio Berdegué, pointed out that Mexico faces various challenges. He is the Regional Representative of the Food and Agriculture Organization of the United Nations (FAO) for Latin America and the Caribbean. According to him, although the programs aimed at peasants by the government of President López Obrador seem well focused, they could be part of the solution to the crisis.

83.4 millones de personas enfrentarán riesgo de una crisis alimentaria y hambre durante 2020
83.4 million people will face the risk of a food crisis and hunger during 2020 (Photo: Internet)

Food crisis in Latin America

He added that the south-southeast of the country will be the most vulnerable area. In addition, he highlighted the leadership of the Ministry of Agriculture and Rural Development (Sader) to convene the region's agriculture ministers. Thus it will be possible to create conditions to keep food trade channels open. That for one health crisis don't become a food crisis.

If the pandemic can be contained soon, and lockdowns are eased, parts of the economy could enjoy a recovery. In that scenario, expect a jump in spending on certain goods and services after months of pent-up demand. Especially by the workers who retained their jobs.

In general, don't expect a sudden recovery. Both businesses and consumers will be careful about spending. Social distancing is likely to remain common. That even after the worst of the virus passes. Also, if infections and deaths rise again after the situation appears to be under control, the economy may worsen.

The pandemic destroys the income of the poorest population and increases the risk of malnutrition. The governments of Latin America must join efforts so that a health crisis don't become a food crisis.

FDI: Mexico loses attractiveness for foreign investment

The Foreign Direct Investment Confidence Index (FDI) of Kearney 2020 showed that Mexico has left the list of the Twenty Five most important priority locations in the world. Mexico was dropped from the list for various reasons.

For example, the small historical growth, the transformations in the "rules of the game" and the lack of clarity in the regulation. Added to this is the fact that several private works have been paralyzed

So, one of the examples that we find is the transformation of rules that delayed the Energy Reforms, in the stages of exploration, production and new projects for the production of renewable energies and this situation affected the result.

The cancellation of the Texcoco Airport and the brake on private investments, such as the Constellation Brands plant in Mexicali, also undermine credibility in a rule of law.

IED: México pierde atractivo para la inversión extranjera
FDI: Mexico loses attractiveness for foreign investment (Photo: Internet)

FDI: economic consequences for Mexico

José Luis de la Cruz, director of the IDIC, notes that we have three reasons that distanced the IDE from Mexico. Initially the financial crisis of the industry. Second, T-MEC, since the companies already predicted that we would have pertinent changes in the automobile business.

Since companies have been looking for other destinations to apply their financial capital. Finally, we have an environment that is not conducive to business, since several countries do not have available resources.

This is not the first time that Mexico has been left out of the list, in 2011 the country was not in the group of countries listed. In 2019, Mexico was very close to being left out of the index, in twenty-fifth position. Mexico's best place in the index was in 2000 when the country was ranked third.

Emerging and frontier markets will suffer much more at the hands of COVID-19. A confluence of factors is at play. They include inadequate medical infrastructure, limited fiscal options, and significant debt overhang. All this considering the highest levels of poverty in general.

The first place in the ranking was, for the eighth consecutive year, for the United States, followed by Canada, Germany, Japan, France, the United Kingdom, Australia, China and Italy.

Only three emerging economies made it into the index this year, these were China (8), the United Arab Emirates (19) and Brazil (22). Although China remains the best-ranked emerging market in the index, it fell to its lowest position this year. This reflects that investors believe that Mexico is a less attractive destination for the FDI compared to other countries.

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Understand more about the tariff crisis

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