Credit cards are the king of convenience and there are many benefits to owning a credit card, like building up an essential credit rating or paying for something in an emergency such as a new washing machine. The best thing is they provide great financial insurance, so if the company that you bought your product off goes bust; the card issuer repays the amount, something impossible with a debit card.
Yet they can leave you in financial ruin if they aren’t respected and used wisely.
So to help guide you into the intimidating choice of credit cards here are a few useful tips to consider to make a credit card a beneficial asset.
Pay it off monthly and pay it in full
If there’s only one thing you take away from these tips make sure it is this one. If you fail to adhere to this you will start to accumulate heft interest charges. Additionally there are also penalty fees for late and missed payments so be sure to pay your monthly fees and pay them in full.
Don’t have it on you all the time
It’s so easy to pay for things on credit card that it’s easy to forget how much you’re spending. If you know yourself to be a shop-a-holic then you should get into the habit of leaving it at home when casually shopping and instead use it for vital purchases such as repairs or travel tickets.
Pick the right card
With so many options out there picking the right credit card can be hard, especially your first one. Cards that charge 0% interest on purchases are ideal if you are looking to spread the cost of a purchase whereas cards that offer 0% on balance transfer are a better option if you have already built up a debt on another card.
If you are looking to stay with the same card long term then you may prefer a card that offers a low lifetime rate for both purchases and balance transfers. These are ideal for people who frequently travel as they incur a low charge to use abroad.
Optimize your finances
By maximising your income, reducing your spending and most importantly budgeting you can afford to make the necessary repayments you need to as well as live the lifestyle you want.
Having a stable job and decent income go hand in hand with owning a credit card, they are not an option for fast cash and should be avoided if you are already in debt as things can quickly spiral out of control.
If you know it’s going to be a tight month financially then consider cutting back on things you don’t need. Miss the gym that month or perhaps miss that show or two but don’t miss your repayments!