The Credit cards brings us a lot of convenience. But, if we are not careful enough it can get us some serious financial mess. It’s important that we understand the rules and use it responsibly and wisely.
Plan Your Monthly Expenses
The consciousness regarding your credit card starts with a concrete financial planning. Spending in a judicious way is always appreciated. For this you need to identify your needs and wants. List the necessary items in an excel sheet and prepare your monthly expenditure plan.
A credit card is always considered as a bank loan in disguise. Unless you repay the loan you eventually end up paying interest instead of your actual balance. So don’t let that happen to you.
- Stay away from unnecessary purchases. Don’t get swayed by discount offers.
- Don’t spend more than the amount you have to your credit. That means unless it’s an emergency don’t use your credit card. Instead, use your debit card.
- It’s wise to use credit card when you are sure that you can repay the debt. Don’t buy impulsively.
- Going for everyday purchases with your credit card is a bad idea.
Check The Policy Agreements Before You Get Your Credit Card
It’s important to know what you are getting into. Get through all the terms and conditions of the bank before you get a credit card. Things like annual fee, interest over late payments, charges for cash transfer or online payments vary over banks. Therefore you need to choose a card whose rates and fee structure suit you best.
Read and understand the issuer’s credit card policy agreement. Gain proper information about the fees and charges for whatever kind of transaction you make. Make sure there are no hidden charges. In case you find any difficulty, reach out to the issuer by phone or email.
Remember The Due Date And Pay In Full
If you find it difficult, the simplest ever thing you can do to avoid late payment penalty, is set a reminder in your cell phone or in your email. It’s very important to remember the last payment dates of your credit card. Unless you do, you don’t just miss a payment and bear a large balance carried forward to the next month, you also affect your credit scores.
However, paying the entire amount is equally important. Financial experts always advise the same. You must strive to pay the full amount every month. But doing so isn’t always possible. In such cases, paying as much as you can above the minimum required is essential, as it will minimize the balance on which interest accrues
Besides, there are certain rewards and additional points, a credit card holder can get if they are regular in their action.
Don’t Forget Your Credit Card Limit
It’s the maximum amount of credit you are allowed to use without penalties. Exceeding the credit limit often results in over the limit fee and the issuer might raise the interest amount accordingly. It puts an adverse effect on your credit score.
The higher your credit card balance, the lower your credit utilization and the more your credit score is hurt. So it’s always advised to keep at least 30% of your credit limit in the account.
Stay On The Safer side
- Keep your personal information safe in order to keep safe from identity theft and credit card fraud.
- You need to be proactive when it comes to reviewing your credit card statement. Do it at least once a month.
- Check the transactions and notify the issuer if you find any unrecognized amount. Don’t take the statement for granted. Each of the transaction mentioned on it may not be accurate. Doubts of any kind should be cleared immediately.
- Never share your card, PIN and security code with anyone.
Cautiousness is the key to staying away from unwanted financial evils. Credit card is an important and valuable monetary instrument. We must not misuse it, because if we do, we will be the losers.