Without a doubt, credit cards today have become the most preferred medium to make purchases anywhere at anytime. We may apply for the credit cards with the intention of using it during emergencies but it does not always work that way, and we start using it frequently. This has led many of us to struggle with debt amassed due to our impulsive purchasing and non essential spending, which in turn increases our financial worries.
Use of credit cards can be beneficial but detrimental to your financial happiness at the same time, if you do not use them judiciously. Following are some guidelines which would help you in making right use of credit cards:
1. Choosing the best credit alternative: At first, you need to scrutinize credit offering various alternatives that are available in the market. While scrutinizing these, you need to focus on three main factors i.e. interest rate, fee & payment schedule. Select a credit card that best matches your requirement. This helps you to make your monthly payments easily & you can comfortably move on with your other monthly expenses.
2. Check your credit card statement regularly: You should check your card statements on a regular basis and should not neglect them. Even though time may be short at times, taking a cursory glance of your credit card statement is all but important. This helps you in knowing about your present status, where do you stand, and accordingly what are the things to be done to overcome the financial hurdle, if there comes any. Also if you find any doubt related to your account, you should immediately call your credit card company and get the problem solved.
3. Avoid late fees: Most of us do not realize the importance of paying the monthly due amount on time. Due to this habit of ours, we end up paying extra as late payment fine. You may also ask the bank to schedule automatic payment by linking your credit card to your bank card. This helps you to make payments on time and you bid goodbye to late fees.
4. Pay more to mitigate your debt: Try to save more from your monthly income or look for another source of income so that you can make the payment for the whole amount at once. As a result, you will be saved from paying extra in the form of interest incurred on revolving credit.
5. Use online money management tool: Using online money management tools is another option to save you from huge credit card bills. You can use these tools to keep a regular check on your spending and also setup budget limits with notifications. Also, setting up payment reminders via e-mail is of great help in avoiding late payment charges. All in all, online money management tool plays a crucial role in helping you manage and minimize your debt.
Last but not the least; you must use your credit cards sensibly. Excessive and improper use of credit cards would result in increased debt – a definitive cause of financial worries.
The use of credit cards should be restricted to emergencies. Credit card is an important utility in everyone’s life but do not forget to use it judiciously if you want a smooth financial life.