How to Use Your Credit Card Wisely

Remember that day when you first got your first job and how you cherished and enjoyed your first pay? Then, after a few months of receiving your salary, you suddenly felt the need to buy something. But for some reasons, you’re pocket-money isn’t enough and your next salary is still a few weeks ahead.  Then you just can’t control yourself to buy an item maybe because it’s a limited edition,  on sale or you just badly need it. Out of all the reasons in blue,  you use the easiest and most convenient way to settle purchasing matters – a credit card.

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Credit card is indeed a very comfortable way to pay for your shopped items when you don’t have enough cash on hand. True enough, credit card payments are facilitated by payment centers and shopping establishments to lure you into spending more. With such comfort and privilege, it’s no wonder why all of us wanted to get one. But along all of these grandeur, another story encompasses.

Since a credit card is about credits that can turn into debt, you’ll be paying more than the privilege that has been given to you. But since your salary has been spent on paying the dues in the card, your last resort in buying the necessities charges to credit once again. When the creditor is no longer able to pay monthly dues, that’s where the debt trap problem begins.

Credit card is not essentially the culprit. The real culprit in this story is the way we manage this plastic. So in order for you to not end up loosing in this financial battle, here are some few tips on how to use your credit card wisely.

  • Never use your credit card to make everyday purchases.

This is a big NO-NO for credit card use. Items like food, clothing, and gas are some of the basic commodities that your pocket money are better off to pay. Necessities should not be charged to credit at all. You have one salary that pays you in cash and the majority of your necessities should be charged to it. If you’re using your money to buy something else and least prioritize necessities, you obviously have a problem. Using it as a substitute for cash will only end up in increasing the debt in that car, thus resolving into higher interest to pay. Just leave your card in these kinds of purchases unless the circumstances demand.

  • Never leave a balance.

As many may refer, this is the holy grail of credit card use. As long as you pay your balance on time and in full every month, you will never have to pay a dime for interest or fees. Instead, you will be earning interest on the cash you held into form the time when you made your purchases. You have to understand that credit card interest can go up tp 3-4% monthly. Make it a habit to pay your monthly balance and for sure, your credit card will never be a burden.

  • Never use your credit card to buy thing you can’t afford.

This is the fastest way to a debt trap in the context of credits. The sad reality is, a lot 0f people find comfort simply with a high credit limit. But a borrowing limit should not be the standard of how much you should be spending. It should be based on how much you are earning and what’s just right on what you can afford. Living that borrowed lifestyle will never make you rich but can quickly get you into debt. Just keep it in mind that if you can’t afford to purchase it today, there’s a slim chance of being freed from debt in the near future  if you avail it. It’s better to work that out from your own pocket to be safe.

  • Keep a clean record as much as possible.

This is a very important factor to look into. Always make sure that you’re able to pay your balance on time before choosing to open again a new credit card. Focus on maintaining a clean record than hoarding different credit cards for personal use. Don’t make non-essential purchases so that you won’t have hassle in maintaining it clean.You need to understand that there are thousand credit companies out there looking for preys by offering overwhelming packages upon sign-ups. Don’t get lured to these additional credit cards. One is enough and make sure you’re using it right.

  • Know when to cancel your credit card.

If you want to change your internet service provider, you might get stuck with only a few company rivals. But when it comes to credit cards, expect that there are hundreds of them. So don’t hesitate to cancel a card which you think is taking advantage of you or offering too expensive deals. Just be careful that you keep this at minimum. Too much of this activity can affect your credit store and make it difficult to track your spending.

And these are the few tips that we can give you in  wise spending for credit card. Remember that the answer to financial freedom begins with you.

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