Credit has caused many people to pull out their hair and regret ever getting a credit card. If you don’t use your credit cards wisely it is very easy to get stuck in a bad situation where you have credit debt you just cannot get rid of. The best policy is to not get a credit card to start with. If you can avoid this then do so. However, you do you need a credit record to rent a house or buy a car. Luckily, there are different types of cards and several ways to keep yourself out of trouble.
Understand what You’re Applying For – When you apply for a credit card make sure that you read all the materials and ask a lot of questions. If you don’t understand something, ask or find out. You don’t want to sign up for something that you may later regret. Check for fine print and know what your interest rate will be.Being informed is a very important aspect of wise credit use.
Pay Your Bill in Full – The first and most important tip for wise credit use is to pay off your credit card bill in full every month. So, no matter what the amount you spent, you should pay it off and start with a clean card the following month. If you follow this tip, you will avoid paying interest fees and accruing debt that you may not be able to pay off in future.
Be Careful With Multiple Cards – If you only have one credit card, focus on paying that bill in full every month and avoid applying for another one. If you have multiple cards that all have debt on them, you may want to reconsider your spending behavior. If you have multiple cards, you should try and keep at least one clean by following the first tip we gave you. While you do that you also need to make your payments towards the other credit cards. Try and pay more than the minimum so you can get the debt amount down faster.
Keep it for Emergencies – A credit card shouldn’t be a way to spend more than you have. That is actually a very dangerous habit. Instead of using your credit card for impulse or unnecessary buys, keep it for emergencies. Things like medical emergencies, a course you want to take or having to buy a plane ticket unexpectedly can be paid for on your credit card. You should try and use your credit card as a fall back for emergencies and not for spending sprees.
Avoid Unnecessary Purchases – We have mentioned this a few times because it is important. Spending because you can on your credit card will eventually get you into a trouble situation. If you spend without paying the full amount back or make use of several credit cards, the debt builds and can become a big mountain of financial debt and problems.
Credit can be a saving grace in an emergency but it can also be your downfall if used unwisely. Follow these tips and use your credit cards wisely and avoid debt problems. For more tips, visit our RESOURCES page as well as here and here.