Credit Card Management

Credit Cards are not all bad. However, for some reason most of us are not exactly successful in managing our credit cards. We fall prey to living beyond our means and being an impulsive buyer.  To make sure that we use our credit cards appropriately, here are some of the tips that I find useful to ensure that I managed my money and loan well:

Don’t use your credit card if you think you can’t afford to pay them on time: A lot of consumers overlook the need to control their spending habits. In the end, they swipe and swipe their card away not thinking of the consequence on how to pay it back come billing schedule.

Avoid availing the cash advances: As much as possible, steer clear of using your credit card to get cash. Most of the time financial companies give a higher interest if you get cold cash using your credit card. Aside from that, interest is already starting once you get the cash. So even if you have already paid the amount in full, you still have to pay for the interest that goes with availing the cash.

Create your budget: One of the best ways to keep track of your spending habit is to write down all your expenses, monthly bills and other payables every month. This way you’ll be able to know if you have already spent too much and will also know how much resources are still available so that you can make the necessary adjustments.

Use your credit card for emergency purposes only: While it’s really hard to be debt-free, there are instances that we can’t avoid having an emergency in our family. Since, you don’t have enough cash at the moment; your credit card is the best option. However, once you use it make sure that you will have a plan on how to go about making the payment to avoid piling up the debt on your credit card.

Make sure to make your payment on time: Make sure that you already allot the budget to pay for your credit card bills on time. Remember that once you skip or be late in payments, charges also pile up like interest, late fees and others. This would definitely add up if you are not mindful with the schedule of your payments.

Try to pay your balance in full: This is a good practice because once you pay-off your credit card balance in full, you will avoid being charged interest rates and other fees.

Avoid having too many credit cards: It’s really simple, the more credit cards you have, the more bills you will pay every month. So make sure that you can only “bite in what you can chew” to keep away from being in debt trouble. After all, you don’t need too many cards. As long as you really know how to manage your finances, you don’t need a lot of credit cards.

Keep track of your purchases: This is a fool proof way of back-tracking all the things you’ve spent – because sometimes there’s a tendency to forget what you’ve purchased in the last couple of weeks or months.

Finally, you may want to leave your credit card at home: An effective way to resist temptation is to keep it out of reach. If you think that you have enough cash to spend, leave your credit card to avoid overspending and using your credit card.

 


Posted on August 23, 2015 at 12:44 AM