A credit card can be a very valuable tool if you know how to use it correctly.
Similarly, using a credit card irresponsibly can hurt you a lot in your personal and family finances
I like to say that a credit card is like a knife. A very useful tool, but if you use it without care, it can seriously harm both you and your family.
Many people use credit cards without care. And most people have large numbers of debts from their credit cards.
The improper use of a credit card makes many people unaware of the price of the items they buy. Many times paying something in cash makes us much more aware of the expense than if we did it through a credit card.
It is very easy to spend using a credit card, however, paying for purchases later is not that simple.
How to use credit cards in your favor
If you want to use credit cards correctly, you don’t have to give them up completely. Although if you have problems to take care of your expenses, it is not a bad strategy to cut with them.
Instead, adopt some simple and simple habits that allow you to enjoy the benefits of credit cards:
- Flexibility in payment.
For this, I recommend that you follow these tips to become an expert when using your credit card and thus become your best friend, rather than a mortal enemy of your personal economy.
Pay the entire bill each month
If you do not want to end up with a lot of debts, you should get as far away as possible from the debts caused by credit cards.
That means buying only what you can pay at the end of the month and paying your bill each month, to avoid falling into unnecessary debt.
Doing so may seem like a challenge, but this is the number one rule of using a credit card as an expert, rather than being used by you.
It is really the only way to avoid borrowing with a credit card and the only way to avoid paying interest on your purchases.
Never pay, be late in paying your bill
In addition to paying your bill each month in full, you should also be very careful to pay it on time.
Most credit card issuers charge a fee, quite high, for a late payment.
Paying all your bills every month and also on time, without delays, is an excellent way to keep solid personal finances away from debt .
If you are worried and afraid to forget or lose your payment due date, set a reminder on your phone a few days before or mark the date on your calendar.
Another option is that you establish an automatic payment in your account so that on a given day of the month the bill is paid.
Talk to your financial institution and ask if this is possible. It will avoid many headaches.
Use your bank’s tools
One of the reasons why payment through a credit card is easier to use is because it leaves a paper trail (invoices, bank notifications, etc.), unlike cash, that you must be yourself who keep control.
When you spend with your credit card, it is not necessary to save the invoices. Simply entering your bank account you can see where you spent, when you spent and how much money you have left.
Logging into your account frequently, at least once a week, can help you keep track of your expenses, so don’t forget to leave them out of control.
If you notice that you are spending more than you should, stop using your credit card immediately until the following month or until you have paid all your bills.
In addition, examining your account activity can also help you detect any specific excessive expenses. Are you spending too much on clothes?
Banks offer very interesting tools to track your expenses, use them for your benefit.
Use your credit card to supplement your budget
If you are disciplined enough, you can use your credit card as a complement to your monthly budget.
This strategy generally involves creating a written budget and then using your credit card for purchases until you reach your predetermined spending limits on the budget.
This is a great way to get rewards and discounts for purchases with the credit card, making purchases that you would make anyway and thus make the most of your credit card as an expert.
Remember, to avoid scares and dismissals, enter at least once a week in your account, to see your weekly expenses with your credit card.
Choose your credit card for additional benefits
Even if you are not interested in a credit card for its rewards, you can take advantage of its benefits.
For example, some credit cards offer very interesting benefits such as free travel insurance, coverage of different grades when renting a car and other types of extended guarantees.
If you pay your bill in full each month, you can enjoy all these benefits for free.
Yes, most people usually use credit cards very badly. The issue is that you do not have to be one of them and you can learn to use your credit card as an expert.
Instead of being a victim of the misuse of a credit card, it breaks the trend and uses this useful tool in the best possible way and in a responsible way.
The benefits and rewards that you will get for your economy are incredible but only if you have enough knowledge and willpower to use your credit card as an expert.