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Knowing how to use your credit card intelligently is key so that it does not become a double-edged sword. Plastics are useful payment instruments, as they avoid the risks of carrying cash and also allow you to pay for your purchases in installments.
In this post we give you some tips so you can learn how to use your credit card and take advantage of it in a responsible way.
1- Avoiding debt is the key to how to use your credit card
The first tip for you to know how to use a credit card correctly is how to buy. You should always do it with as few odds as possible. Many people usually choose to pay in more than 6 installments, but before deciding the term in which you are going to pay, keep in mind that the interest is high, much higher than that of a free investment credit, for example.
When the sellers tell you that the quotas “were not even felt”. Lie! Get out of there as soon as possible. Do not buy anything at 12, 24 or 36 installments if the product or service is not really necessary and even less if you do not have the money to pay.
Take advantage of the installments to buy products that you really need and that are worth the investment, yes, with planning, you will be using the credit cards without getting into debt.
2- Pay on time
Whether you carry out the previous advice to pay or decide on large installments, one of the keys to using a credit card correctly is to comply with the respective payment dates; otherwise, they charge you default interest, which is also high.
The second lesson to learn how to use a credit card without getting into debt is to try to choose a single installment, never pay only part of the bill and make the full payment.
A good thermometer to know if you can buy or not is to have the money for payments in sight. If you don’t have it or it’s not enough, then immediately stop your purchase intentions with the card. If a bill arrives that you can’t pay, this is a sign that you need to put aside your plastic and take a closer look at your budget.
3- Do not finance expenses
Another good technique when you are learning how to use a credit card is to buy goods, such as appliances. It is not smart to use the card for expenses such as restaurant meals, since in this case your wealth decreases as your debts increase without increasing your assets. He thinks, for example, that if nobody requests free investment credits to pay for unproductive expenses, they should not do it through plastic either.
However, one type of credit card user is frequent buyers. Those people who use the card to make most of their purchases, from the most expensive ones, such as the grocery store, to the most everyday ones, such as coffee.
This is a good option for someone who has their household budget up to date, has great control over their money, and already understands that the credit card limit is not money beyond salary. If you have that self-control, you probably already know how to use your credit card and you benefit from its frequent use, since you accumulate points to redeem. Oh no? Don’t have a card that earns miles? Better go through Compare and choose one that allows you to have more benefits.
But if you don’t have such control, don’t worry, you’re not unique. There are a multitude of people just like you. In this case, the best strategy to use the credit card without getting into debt is to avoid compromising your budget and that is only possible through planned purchases.
4- Take advantage of the cut-off date
A good tip to know how to use your credit card is to learn how to manage your purchases with the cut-off date. If this is the 30th, for example, try to make your important purchases on the 31st or the first of the following month, as this will give you a longer term and it will not be immediately reflected in the next installment. Take advantage of those days of grace period between the closing of the card and the payment.
5- Do not fill yourself with cards
Even if they are offered to you, we do not recommend having more than two. Remember that even if you do not use them, in many cases you will have to pay a handling fee. It is preferable to request that you increase the quota in which you have.
It’s hard to resist a product you’ve wanted for a long time, especially when you find it on sale. A trip, a television, a Play, those shoes or that bag that you like so much. If it’s impossible for you to see it and not buy it, the solution is simple: don’t go out with your credit card in your wallet. Buying without planning is the No. 1 enemy to get into debt.
6- Reviewing the statement is a good use of your card
Another tip to know how to use your credit card correctly is to start saving all payment receipts and keeping track of what you spend. This way you will avoid surprises when you receive the account statement.
Learning how to use a credit card is a good strategy, because if you don’t know how much it really costs, instead of helping you, it will become a stone in your shoe.
Always be attentive to the statements, since improper charges may appear, which may be operator errors or even the product of a clone of your card, so be careful. And when you have any questions, contact your bank immediately.
7- Avoid making cash advances
Cash advances are one of the benefits of a card, but only in an emergency. Doing so is often expensive and dangerous for your pocket. In addition to charging you a commission, the interest is generally higher and is deferred for a term of more than 12 months, usually 18 months.
Now that you know how to use your credit card, the important thing is to handle it prudently and taking into account that you will have to pay what you consume, even with interest. Make smart decisions. Find out and compare!