Credit cards can be great if you know how to use them properly. If you are a smart user of a credit card, it can be rewarding, on the other hand, using it recklessly can result in big problems, and can affect your credit score. One of the problems is that credit cards are so easy to get these days and it takes just a few minutes to apply for a credit card online.
If you don’t want to be faced with a huge credit card debt and overwhelming interest charges, below are some helpful tips on how you can best use your card to your advantage.
Pay Your Bill in Full Every Month
Make sure to pay your bill in full every month if you want to stay out of debt! This means you must only use your card for what you can afford to pay off. This can be a bit of a challenge at first! So ensure that purchases made with your card are within your budget when the statement arrives. This is the only means for you to stop paying interest on your credit card.
Select a Card that Fits Your Needs
One of the best means to enable your credit card work for you is to choose the one that suits your needs based on your spending habits. Maybe you make use of your card frequently for grocery and food shopping. It would be great to look for the card which will allow you earn some discounts or rewards on your groceries. If you’re utilizing your card for numerous diverse purposes, go for the card which provides flexible rewards. If you have existing credit card debt then you might want to considering getting a balance transfer credit card. It pays to examine the kind of credit card that will suit you best. It’s not normal to basically choose anything that’s available. Know your needs and choose the one that will best meet those needs.
Stick to Your Limit
Determine a limit and stick to it and make sure you don’t overspend. Even if you have been given a large credit limit by your credit card company, it does not mean that you have to use all of it! You may have your personal self-imposed limit; if you have already reached that limit put away your card. You can as well call your credit card company and request them to lower your credit card limit to something which is more manageable for you.
Pay Your Bill on Time
One simple rule you must keep in mind is that don’t be late in settling your bills. Nearly all credit card organizations charge extremely painful interest rates. Meanwhile, very few credit card company charge low-interest rate. However, no matter how low the interest rate is, it is never a good practice to pay your card late. This is particularly right if you are concerned about your credit score. Making your payments on promptly will assist your credit score. Make sure that you don’t miss your payment date. Set a reminder on your phone if you must. Better yet, don’t wait for the due date, pay for it ahead of time if you already have the money set aside.
Only Use Your Card For Large Purchases
It might be tempted to use your credit card for little purchases particularly when you see huge discounts when you pass by a store. Though these little purchases may build up and they may sneak up on you without taking cognizance of it. To stop this from occurring, make sure you use cash first particularly for the purchases you can pay for. Then use your credit card just for large purchases like some expensive gadget or an important home appliance you’ve always wanted. This way, you have a better opportunity of earning big reward points out of your purchase.
Make sure you get these purchases paid off as soon as possible. Spreading out the payments longer will only increase the amount of interest you’ll have to pay.
If you follow these tips, it will be easier to make your credit card work for you. Having a credit card is a wonderful thing if you’re a responsible cardholder.