Choosing the right credit card is not easy. There are in fact hundreds of different credit cards, and each has its own characteristics in terms of interest rates, fees, benefits and rewards. If you take the time to shop around and carefully consider the options available to you, it will be easier to find the credit card that fits your lifestyle and your budget.
10 tips to help you use it wisely
1. Be well informed
Make sure you are well informed before you commit. When you apply for a credit card, you enter into a contract which is accompanied by obligations in terms of the law.
Read the terms carefully to understand their application and know your responsibilities.
2. Live within your means
Remember that having a credit card does not increase the amount of money you have available for your expenses. Continue to live within your means and your budget.
3. Pay your balance
You should pay your balance in full each month, respecting the due date. In reporting a balance, all expenses you make using your credit card cost more than the purchase price, because you pay interest.
The longer you carry a balance, plus the cost is high. Financial institutions must indicate in the credit card statements they send you how long it will take to pay off your current balance in full if you pay only the minimum each month.
To make your own calculation, or to find other options to help you pay down your balance faster and pay less interest.
4. Make payments quickly
If you cannot pay your monthly balance in full, and the outstanding balance increases, it means that you spend more than you can afford it and you are more into debt. If this is the case, stop using your credit card until you have regained control of your financial situation.
Because interest expense is charged daily, try to make your payments as soon as possible to reduce these costs. In addition, if you have trouble controlling your spending, consider asking the financial institution that issued your card to reduce your credit limit.
5. Avoid impulse buying
Avoid impulse buying, especially if you do not have enough money in your bank account to pay. Before making a purchase, ask yourself if it is really necessary. Also ask yourself if you need it now, it may be better to wait to have enough money to make the purchase.
6. Do not increase your spending to get more points
If your credit card offers a rewards program, do not increase your spending and do not buy things you do not have the sole purpose of accumulating points.
7. Avoid cash advances
Unlike regular purchases, it does not provide a grace period for cash advances made by credit card. You pay interest from the day you receive an advance of funds until the day you repay the full amount of the advance.
Instead, use your debit card if a merchant offers the option of “cash back” with your purchase or withdraw money from your account at an ATM from your financial institution. If you do not have enough money in your account, review your budget to determine how to reduce your expenses.
8. Ask your financial institution
If you need money for unexpected expenses, see the staff of your financial institution. You may suggest methods of payment including interest charges are lower than your credit card, such as a line of credit.
9. Make regular payments
Make regular payments to establish good history of credit. By paying the balance of your card in full each month, you will show to other lenders that you are a responsible borrower.
10. Read the fees associated with your card
Be aware of all the fees associated with your credit card. All federally regulated financial institutions must ensure that there is an information box in the application form of credit card and credit agreement, which includes key information such as fees and interest rates.