A credit card is something that can bring great joy if you use it wisely. A solid credit card gives you the freedom to spend money when you need it, even if you don’t have it. However, credit cards can also lead you into massive amounts of debt if you’re not careful.
Many people forget that credit is not free money. Your credit card expenses quickly turn into payments and high-interest rates can really mow you down. So, does that mean you shouldn’t use a credit card?
Well, if you’re someone who can be a little disciplined and show restraint when required; a credit card can be extremely useful.
So here are top tips to help you use credit cards more wisely:
1. Know Your Annual Fees
The first thing to ask a bank before taking a credit card is what the annual fee is. While there are many credit cards that have low to no fee, other premium cards can have a hefty annual fee.
One that you may not be able to afford in the long run. So, be careful about the card you get, behind all the gold, platinum and black cards is a fee you ought to know about.
2. Check Your Billing Cycle
You can forget your anniversary, you can miss your child’s soccer game but, it there’s one thing you should never miss is your credit card payment. Credit card interest rates card is brutal and they work against you if you miss them very often.
So, ensure you know when your credit card bill is due and pay it off. No one likes paying late fees and credit card bills card set your savings plans back by a fair bit. Therefore look at your credit card statement and see when your credit card payments are due.
3. Pay Bills Before the Due Date
That’s right! When it comes to credit card payments you’re better safe than sorry. You don’t want to hurt your credit score or end up paying exorbitant late fee charges. And make sure you don’t just pay the minimum payment.
You want to avoid raising debt so pay off the whole amount as a habit.
4. Don't Be Reward Hungry
Most rewards, freebies and discounts are nothing but upsells. Don’t fall for the trap – if you’re paying for something you can afford and need – you’re being wise.
If you pay for something that you know is too expensive and are justifying it with the points – you’re on the wrong track.
Don’t be driven by points, rewards and benefits alone. Use the card on what you need and let the rest bring extra happiness where it can.
5. Only Use Your Card At Shops You Trust
Credit card fraud is a legitimate concern world over. You don’t know who is sitting to steal your details in just a swipe. Although modern-day chip cards have changed things a lot, it is still best to only use your credit card at a merchant you trust.
If you’re at a place you don’t trust completely use cash or a debit card with the limited account balance.
6. Maintain & Use That Credit Score
One benefit of using credit cards is that you can get a good credit score. As long as you make regular purchases and pay it off in time – your credit score stays solid.
This means you’re more trustworthy as a borrower to banks. Which makes it easier for you to get a loan compared to others.
7. Keep A Low Dependency
Don’t depend too much on your card. If you make big and regular payments from your card, it’s a sign that you can’t meet your expense requirements on your own. A lot of people don’t know this but spending more on your card isn’t necessarily seen as a positive by lenders.
You’re better off slowly increasing your spends in your credit card and spending what you have in your account most of the time.
8. Avoid Getting Multiple Credit Cards
Too many cards can spoil the credit broth. Why do we say that? Well, there’s just more to manage and think of. It’s a pain for most people to keep track of just one credit card imagine having 4 or 5.
It would be chaos and more importantly… no one needs so many credit cards.
9. Protect Your Credit Card Information
This is something we can’t stress enough on. Don’t share sensitive card information with anyone. Don’t make assistants, maids etc pay your bills.
Don’t leave it to a friend and don’t hand your card to your driver to go buy groceries. Be extra careful about your card and it’s information.
10. Automate Your Credit Card Payments
Last but not least, automate your credit card payments. That way you never miss a payment, you never have to pay late fees and you never end up paying hefty interests.
Not to mention the peace of mind of knowing payments are going to happen without any effort. Just maintain enough balance in the account you use for auto-debits and you should be good.
Those are our top 10 tips to use a credit card wisely. Don’t forget to share this blog with your friends.
You should watch this episode of The Cube Wealth Show where we share money saving tips with you! These would go a long way in helping better manager your finances, as would using your credit card wisely.
Rishabh P Nair
Rishabh P Nair is the Head Of Brand Content at Cube Wealth, the Financial Freedom App with a smart Perfect Portfolio Planner. Rishabh has been weaving stories for over 10 years and prides himself on building brands with a strong identity.
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