Seven Smart Ways to Use Your Credit Card Wisely

Credit cards are very popular among people today as they offer flexible payment options. They offer the convenience of not carrying the cash. However, you need to use them wisely by limiting the number of times you use, because with each use, you are borrowing money that you have to repay. If you are unable to repay the amount on time, the creditor will charge you with a high interest for late payments, which may lead you to heavy debt.

If you don’t want to get into any such financial troubles, here are smart tips to use your credit card wisely:

1. Always repay your credit card due on time: It helps you avoid higher interest or late payment fees that you have to pay when you delay the payment.

2. Stay within your limit: Use your credit card sensibly. Keep a close watch on your spending and track it. See that you don’t spend beyond your credit limit. If you do so, it will burden you with additional debt.

3. Pay more than the minimum limit: When you have a good amount of surplus, make sure to repay the full amount that is due, in that month, instead of paying the minimum amount. It will help you avoid being charged with late payment or default fees or penalty rate.

4. Don’t apply for another credit card: Think carefully before you decide for a second credit card. Multiple cards with improper usage would result in bad credit score. You will be in trouble, when you are unable to clear off the bills. It is therefore, better to have only one credit card.

5. Review your credit card statement every month: Register to receive your credit card statements online every month. The statement mentions the due date, the late payment fee or penalty rate, in case the payment is received late. It gives overall status of your credit payment.

6. Don’t opt for higher credit limit: If you opt for a higher credit limit, you may end up spending more than you can repay. You will not be able to afford to pay the monthly credit card bills as you have already spent beyond your budget.

7. Don’t use your credit card for impulsive purchases: If you are an impulsive spender, stay away from credit cards. Credit cards encourage you to spend whenever you want, even if you are not carrying cash and unknowingly you will get into debt.

If you repay your credit card bills on time, it will reflect a positive transaction on your credit report and helps you build a good credit score. With a good credit score, you may get low-interest loans and various offers in future. Therefore, the credit card can really work better for you, when you use it wisely by cultivating sensible spending habits.