Using your Credit Card Wisely – A Small Guide!

In the world full of the hustle and bustle, almost everyone around the world uses credit cards for different purposes. To get a good credit card rating, one has to use a credit card again and again. Many people use a credit card wisely, but some people get trapped I this scheme and end up in heavy cycles of debt. The debt keeps on increasing because of the heavy interest rates by the private sector banks and agencies.

How to Use your Credit Card Wisely

using credit card wisely

 

Here are some ways to use your debit card wisely to escape the cycle of debt –

1. Use reward points

Many credit card firms and companies offer rewards point for some successful transaction. By blending the monthly purchases and bills, one can get a huge amount of rewards which can be used for discounts, cashback for many goods and services.

2. Check out for hidden fees

Almost 90% of the credit card holders get trapped under the hidden fee structure. Many firms print the information of hidden fee information on the back side of the paper which is almost never understood by common people. Before issuing a credit card, know about hidden fee structure such as processing fee, maintenance fee, late fee, the rate of interests, etc.

3. Clear credit card debt weekly

Try to clear up the debt weekly or on the basis of the monthly cycle. Try to pay money in advance so that it may help in times when you are not in an emergency or not in the status of paying the amount. Pay even the smallest debts as soon as possible to avoid heavy interests. Paying back amount early helps people to avoid paying a higher rate of interests.

4. Never use a credit card abroad

Using credit card abroad can make your pockets lighter due to the heavy conversion charges. Before traveling to any country, contact the credit card form and ask about the conversion rates and charges levied from the users. Basically, the conversion charges levied abroad ranges from 3 to 5 percent.

5. Buy only the items which you can really afford

This is the most basic and crucial step which people strictly need to follow up. While going shopping buy items which you can really afford on the basis of your monthly income. Remember to calculate the interest you have to pay while buying an expensive item, if it fits on your monthly budget then only you should proceed further. The use of credit card in case of shopping and buying unnecessary items should be avoided.

One should realize the drawbacks of having a credit card. If a person is unable to pay the debt, it may affect the credit card rating and even lead to you in legal trouble. People who fail to pay the debt are often regarded as defaulters, and they can never enjoy the services of private as well as public sector banks. Therefore it is advised to use a credit card only in case of emergency. Buy items which you can really afford based on your steady monthly income to avoid the plastic trap.

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