Credit cards are convenient on so many levels. With credit cards, you don’t need to carry large amounts of money, you are able to pay quickly, and also you don’t even need to pay immediately. While the benefits are numerous, credit cards also have a serious responsibility.
It’s very tempting to go on a spending spree and ignore the fact that at the end of the month, the bill needs to get paid. The consequences of misusing credit cards include mounting debt, wasted dollars, and harassment from bill collectors, lowering your credit score, as well as bankruptcy, which is the extremity!
Fortunately, credit cards aren’t a terribly complicated concept. A good dose of common sense and fiscal responsibility will go quite a distance.
Simple Credit Card Management Tips
Follow these suggestions to manage your credit cards wisely:
1. Start with a debit card also called an ATM (Automated Teller Machine) card. Just about all checking accounts now come with a debit card. If you were considering getting a credit card, it would be smart to start with a debit card as training.
• A debit card is similar to a credit card. Therefore it’s a good learning experience if you have set your mind on getting a credit card.
Once your debit card is scanned:
Enter your pin number and get a receipt or just sign the receipt. Debit cards process the transaction immediately. This restricts your spending to simply what you have in your banking account. The exception is when your account is enrolled in an overdraft protection program from your bank.
With overdraft protection, you many spend more with your debit card according to the acceptable guidelines of your bank.
Once your credit card is scanned:
You sign a receipt to complete the transaction. It takes a couple days to process the transaction.
2. Only buy what you could afford. A great rule to follow along with when it comes to credit card me is to merely ask yourself if you have the money for your purchase. If you don’t, then don’t buy it.
• If you’ve got a payday coming between your purchase and also the arrival of the monthly credit card bill, you are able to usually flirt with the line, however when it comes to credit, it’s usually better to err on the side of caution, particularly if you’re new to the world of charge cards.
3. Wait to buy high-end items. There are rare occasions where it’s not possible to wait, like if you want immediate car repairs. However, most expensive items can hold back until you save the funds to buy it.
4. If you need to buy a costly item, quit using the card until it’s repaid in full. This is good practice as it gives you time to repay the debt before it gets out of control.
5. Small purchases accumulate. It seems paradoxical, but it’s true. With a large purchase, you (ideally) use knowing that this can be a big deal and compensate accordingly. It’s trickier with smaller, like regular purchases, like lunch or a tank of gas. We often dismiss small charges as insignificant: five bucks here and there. Before we realize it, though, we’ve tallied up a hefty balance!
6. Keep track of your purchases. A great way to be sure that your purchases don’t spiral out of control is to keep an eye on all your purchases. A spreadsheet or even a small notebook should be good enough.
7. Pay-Off the entire balance whenever you can. Ideally, whenever your credit card bill comes in, you should pay it off in full. The balance usually increases so quickely due to interest charges and late fees if you don’t pay on time.
• Paying your credit card entirely keeps you out of trouble of debt, helps you save a ton of cash on interest and fees, and helps raise your credit score.
Charge cards are more convenient and can help you to maintain an excellent credit rating, when used appropriately. They grant you power, and like every power, it takes an equal quantity of responsibility.So that a lots of people are enjoying the bonuses and rewards to use of Credit cards .