One of the best financial aides is a credit card; it helps you in building and repairing credit. However, there are important factors that you have to be aware of in using and managing your own credit card. There are certain responsibilities and consequences that you have to put into consideration. It is very crucial and important to know the rule of the credit card game.
Before having a credit card, of course you have to apply first. In line with this there are things that you need to know about the credit card that you’re applying for.
First, make sure that you will read each and every term of the card that you are applying for; evaluate it based on the rewards, interest fee, other charges and annual fee. One of the best ways is to compare credit cards not only the type but also the card issuer itself (banks).
Second, ask yourself the following questions:
Where and how are you going to use that card?
What kind of credit card is that?
What is the credit limit?
What will be the pros and cons of that card?
Last but not the least, sit, relax and think about this: Can I control and manage using a credit card?
Using the Card:
Are you a shopoholic? Are you always using credit card in your transactions, bills, and expenses? Well, here are the do’s and don’ts of how to avoid getting into debt.
Always make sure that you check your statements monthly. There are instances that some card details are being copied and used without the owners permission specially for those type of cards without strong security features. Also, to avoid hidden charges. In addition, always check the limit of your card prior to using it. Ensure that you keep your purchases within your budget.
Do not make a habit of paying your due with just the minimum amount. If you are not new with the credit card regulations then you know what it means. The tendency of paying the minimum amout due is to prolong the time to pay off your debt, and the interest and other bank charges will take into action and start to balloon your total due balance. Furthermore, avoid using the cash advance feature as the interest charge for it is higher. Another one, don’t have too many credit cards; lots of cards means higher debts.
When you already have your own credit card, it is best to know that how you use your credit card is everything. One of the important factors is to use it on a right way to build and maintain a good credit standing. The bank, issuer and even the credit card has no manual to tell you about it. The key in managing a credit card is being responsible; read your statements, pay it on time, know how much limit is still left in your account, practice discipline, and monitor your activity every now and then.
In addition, if you have cash then used it instead of your credit card, specially for things that you purchase on a daily basis. Also, avoid buying things that you can’t afford and you actually don’t need; this will just result to a huge amount of debt. If there is something that you really want and you can’t afford them, just be patient and wait for the time where it is affordable for you.
A credit card is like a game that you have to play wisely, remember a bad debt makes a man poorer.