The Basic Do"s and Don"t of Credit Card Use
There is no denying how convenient and beneficial credit cards are.
They allow cardholders to pay their bills, purchase anything they set their hearts while making it much easier to keep track of any purchases made.
However, credit cards may become a major cause to a person's financial distress if they are not used smartly.
The fact is that cards are also meant to encourage people to spend more and if you have neither the will to control your spending nor the capacity to pay off your balance, then use cards with caution.
Before you get one, it is best to arm yourself with the right knowledge.
Learning how to start using credit cards wisely will help you avoid any financial trouble in the future.
Consider the following credit card use do's and don'ts: Do's 1) Get one card Having only one card will make it easier for you to manage and control your expenditures, credit lines, etc.
It will also enable you to use a it wisely.
On the other hand, multiple cards can put you at risk and it might result in higher debts and insufficient funds.
2) Do not use cards to pay off variable expenses Another tip on how to start using credit cards wisely is to use cash for variable expenses such as one-time purchases.
Use a card only to pay off general household expenses such as, gas, electricity and communications.
This way, you can still take advantage of the benefits that cards bring without going overboard on spending.
It is also advisable to purchase only items that you know you can afford.
Don'ts: 1) Say no to installments While paying on installments is an attractive offer, it can have many disadvantages.
One of the most obvious is that paying on installments gives the illusion of extra funds to cardholders.
The danger of this is, it will be hard for the cardholder to gauge his actual funds and it will only be a matter of time before he starts losing control of his expenditures.
2) Do not pay using your card Paying using credit cards will do more harm than good.
Know that interest rates on cards are high.
Individually, the interest rate may not be a cause of major concern but collectively, the accumulated interest will be worth a significant amount of money.
They allow cardholders to pay their bills, purchase anything they set their hearts while making it much easier to keep track of any purchases made.
However, credit cards may become a major cause to a person's financial distress if they are not used smartly.
The fact is that cards are also meant to encourage people to spend more and if you have neither the will to control your spending nor the capacity to pay off your balance, then use cards with caution.
Before you get one, it is best to arm yourself with the right knowledge.
Learning how to start using credit cards wisely will help you avoid any financial trouble in the future.
Consider the following credit card use do's and don'ts: Do's 1) Get one card Having only one card will make it easier for you to manage and control your expenditures, credit lines, etc.
It will also enable you to use a it wisely.
On the other hand, multiple cards can put you at risk and it might result in higher debts and insufficient funds.
2) Do not use cards to pay off variable expenses Another tip on how to start using credit cards wisely is to use cash for variable expenses such as one-time purchases.
Use a card only to pay off general household expenses such as, gas, electricity and communications.
This way, you can still take advantage of the benefits that cards bring without going overboard on spending.
It is also advisable to purchase only items that you know you can afford.
Don'ts: 1) Say no to installments While paying on installments is an attractive offer, it can have many disadvantages.
One of the most obvious is that paying on installments gives the illusion of extra funds to cardholders.
The danger of this is, it will be hard for the cardholder to gauge his actual funds and it will only be a matter of time before he starts losing control of his expenditures.
2) Do not pay using your card Paying using credit cards will do more harm than good.
Know that interest rates on cards are high.
Individually, the interest rate may not be a cause of major concern but collectively, the accumulated interest will be worth a significant amount of money.
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