The credit card is simply a financial tool that allows us to have access to credit. However, some people find it difficult to use their credit cards in a responsible way. So what is the correct way to use the credit card?
Here are some keys to get a good start in the correct use of your credit card.
- When you use the credit card, remember that it is the same as asking for a loan . Credit cards are not the same as cash. Like any loan, you will pay interest on the amount you have borrowed each month.
- Control the expenses with the credit card and do not forget to save all the receipts of what you have bought, these will help you to compare them with your account statement, in this way you can also detect in time, in case the bank or commercial company make incorrect charges.
- Schedule your credit card payments along with other monthly expenses such as rent, electricity, water, telephone, tuition; this way you will be able to comply with these payments on time without being charged surcharges.
- If possible and to reduce your credit card debt, pay at least double the required minimum payment.
- Use the card regularly for small purchases and then pay the balance on time. By paying on time and in full, you will have a positive effect on your credit history . Since 35% of your credit score is based on your payment history on time.
- It is much better if you make your credit card payments before the deadline, so the calculation of the interest that the bank will charge you will be on a lower amount and you will avoid being charged late interest.
- If you have the possibility, settle the total amount of the purchases made during the period, so you will not pay interest.
- Do not use so many credit cards, since you can lose control of what is spent with them, in addition to that you will pay more for commissions. It is better if you only control one, so you can keep an adequate level of consumption. Compare and analyze if you can collect your debts on a single credit card.
- Use your credit card for larger purchases (if you can pay the debt immediately). Use your cash or debit card for smaller everyday purchases. Credit cards offer consumer protection against fraud and quality issues.
- For online purchases the credit card is ideal, since you could suffer identity theft. The use of the card means that while the situation is resolved, you are not losing your own money, which if it were your debit card.
- Avoid withdrawing cash from your credit card, only do it in emergencies, since it has high interest rates. If you do, it is advisable to withdraw the money at the bank.
- Analyze if you really need the additional services offered by the bank through your card such as: medical assistance, road and travel accident insurance, because this can increase the minimum charge to pay, if you do not need them you can cancel these services in writing and avoid those charges.
- Cancel the credit cards that you no longer use, so you will avoid expenses in commissions.