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How to Use Credit Wisely

How to Use Credit Wisely PhotoA credit card provides so much convenience to its card holder. You have the power to buy anything you want, anytime you want, as long as you have the card with you. But more and more people are sinking in debts. They’ve overlooked the fact that the money they were spending was not theirs but the bank’s.

Luckily, there are painless ways for you to save your wallet.  Here are 10 easy tricks to help you use your credit card wisely:

Limit yourself to one credit card

The logic is easy: more cards is equal to more debts. Some people love to flash their credit card collection. Unless you want a collection of debts and bills, don’t follow suit. One card is more than enough.

Maintain 30-50% of the credit limit only

Just because there is a large credit limit, doesn’t mean you’ll max it out. Never spend more than you can pay in a month. Unless there’s something urgent that you need to buy that’s quite expensive, never go beyond 30% of the credit limit. This way, you can easily manage your expenses without your wallet groaning.

Don’t use for everyday buying

You didn’t subscribe a card for groceries and medicines, right? Use your card when you have to buy something that you can’t afford right now. If you have groceries to buy, use your debit card. This is a terrific way to lower the monthly dues.

Always pay the monthly dues in full

If you pay your dues on time, your credit report would look just lovely. Also, some credit card companies give rewards to clients who always pay on time. Remind yourself of your due date.

Send a notification

If for some reason, you can’t pay your dues on time, call the creditors ahead. Ask for a grace period. Don’t be shocked when they give it to you. These creditors would do anything to keep their clients.

Keep account number and creditor’s contact details

Always prepare for the worst. If your card gets lost or stolen, you must always have a copy of the account number and the creditor’s contact details. That way you can quickly close or freeze the account.

Keep receipts

This isn’t just for collection purposes. You can track your expenses better when you keep receipts. They will also come in handy if ever a card dispute is filed.

Review credit report

Card disputes always originate from errors in the credit report. This is why keeping those receipts is handy. Read your credit report and review it carefully. A regular review also grants you a good credit card rating.

Go for zero or low interest rates

Always check the transaction fees and interest rates before you swipe. Shop around for the least interest given. Find zero interest items, if you can. Those might be small now, but you might be surprised when your bill comes.

Properly close an account

And last, when you file an account to be closed, make sure you tell the issuer via registered mail. Keep a copy for yourself, for proof.

It’s easy to fall prey to the snares of the plastic. The rewards are extremely tempting, but when the bills come, you wish you never should have bought all that stuff. With immense power comes absolute responsibility. Use that card with caution and spend wisely. There are more prominent places to spend your money on.