Planning to get a credit card? Before you do, here are a few tips on credit card do’s – measures that will help you enjoy the benefits of credit cards to the max if you follow them to the letter!
Know Why You Want One
First, you have to be sure why you need a card. What is your purpose?
Many people get credit cards so that they can establish a good credit record. Their primary purpose is long term; maybe they are planning to buy a home in the future, or maybe they plan to get a car loan, or apply for a home renovation. Whatever the purpose is, having a credit card and managing it well can greatly help establish good credit history.
Some people get credit cards because they want to enjoy the ease and convenience when shopping online or via the phone. Some get credit cards because it’s easier to use when shopping in Malls and specialty stores.
There are also people who get credit cards for the rewards offered every time the credit card is used. Of all the rewards offered by credit card companies, the most sought after are travel rewards, frequent flyer rewards, and flights.
Be Sure to Get the Right Credit Card
If getting a credit card is really a necessity for you, be sure to get the right card. What will make a credit card the right card for you?
One consideration you need to look into is the card’s interest rate. Ask yourself if you can afford it. It’s also very important that you know the fees and charges that comes with it. Evaluate your finances and determine if you have the capacity to pay off your loan or debt with the interest charges.
What are the features that come with the credit card? Some features come with a higher fee, so be sure to get only the features that you will actually use. There are plenty of credit cards that offer numerous features which may not be very useful for you; so avoid them because they will add up to your costs.
Use the Credit Card Wisely
The most fundamental principle in credit card use is to “use it only when necessary!”
Do not use your credit card “just because” … this can be very costly. If you have cash, use cash instead of the credit card when paying for things or services.
Another word of advice: pay your credit card bills on time!
“On time” means at least two days before the due date. Why two days in advance? The two days will give you an allowance for your payment to reach the company especially if you are paying through the mail.
Next, pay off everything! If you do this, you will be able to avoid interest. This is the best way to make the most out of your credit card; you are using the lenders money to pay for your purchases free of charge.
If, for some reason, you can not pay everything in full, pay more than the minimum. This will lower the amount you owe tremendously, and it will make payment on the next due date easier.
Most important of all, should you encounter financial challenges that will make payment of your credit card debt difficult, refrain from using your credit card for a while. Never be tempted to use your credit card in this situation – it will cause you more trouble later on. Slow down with your credit card use. Get back on your feet first, that is, financially. Remember that if and when you fail to pay your debts, it will have a negative effect on your credit record.
These tips are like guideposts; when followed, they will keep you safe from financial troubles in the future.