Tips on Using Your Credit Card Wisely

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Tips on Using Your Credit Card Wisely
Tips on Using Your Credit Card Wisely
Photo Credit: frankieleon via Foter.com / CC BY
Kumar Sunil

Kumar Sunil

Dreamer & Enthusiast

Creative. One word says it all for Sunil. A engineer, an enthusiastic and conscientious Information Technology consultant by profession, Sunil shares a special interest with entrepreneurship and lifestyle.

Nowadays, no denial, but meeting personal expenses is becoming a challenge. Be it a five figure salary earner or six, impacts of inflation can be seen on everyone’s life.

I know many people, who work extra hours and run another source of income on a parallel basis. But, not everyone is capable of doing so. For those, a credit card is a viable option. This financial aid, sometimes becomes a reason behind a person’s financial crises. However, keeping a few tips in mind, you can have best out of these plastic cards. Here are those tips on using your credit card wisely.

Pay Your Balance

The first rule to follow when using a credit card is to spend according to your requirements and income sources. Never ever swipe a card for an amount that you face trouble settling later.

As and when you have cash, consider paying your balance fully at or before the maturity. This way, you will be able to avoid paying interest that adds to expenses and reduces your purchasing power.

Choose the rewards smartly

Most credit cards offer rewards when you incur expenses, and this type of program can save you a lot of money. Taking into account your lifestyle and your consumption habits, determine which card is best for you.

For example, if a credit allows you earn 2% cash rebates on purchases made in two categories of your choice such as movies and grocery or 1% On all other purchases; go for the card that can save you on all.

There is no use of going for a card that offers you miles if you are not a traveler. You won’t be able to redeem your points. Watch out for the point system and their redemption procedures.

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Save when you spend

Once you have a credit card that offers you reward for your purchases; use those reward points to pay your balance. This is a great way to ensure that the rewards are really beneficial to you. Most cards encourage you to buy more from those rewards points. Trust me; that is a trap to keep you in the loop for a longer duration.

Check Your Expenses

Do not spend foolishly. Nowadays, every credit card comes with an online account statement access. Do keep a close eye on every spend of yours. You should watch exactly how you spend because that is how you are going to have control on your spending and expenses. By consulting your account often, you can learn to respect your budget and you will be able to use your credit card intelligently.

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Control your card

In general, bank guys try their level best to offer you a big limit. There is no fun in having a limit that you find hard to fix a later stage. Keep your credit limit way below your income level; at a level, you think is reasonable and you know how to manage it.

Credit cards are not a problem if used wisely. By following the above-mentioned tips on using your credit card wisely, you can simply save yourself from a lot of trouble.

If you are a shopaholic, you can also simply leave your credit card at home and take limited cash with you. This will save you from over-spending and financial crises.

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