How to Use and Not to Use Your Credit Cards?

Contrary to what many people would like to believe, credit cards are fun to use. They are convenient, and have perks to enjoy as you continue to use them. As long as you manage and control your usage accordingly, a credit card is a useful privilege to have. These are the things you should and not do with your credit cards.

Avoid carrying a balance

This is the number one rule to remember in order to keep yourself debt-free. As long as you pay for your purchases in full and on time every month, you’ll never have to worry about interests and other charges. You can register online to keep track of your purchases and to be updated when your statement is due. You can also set up automated payments to make sure you never miss out on your due dates.

Keep your old cards

If debt starts building up and you feel the need to close some cards, you should remember never to close your oldest cards. Since these cards have the longest credit history, cancelling them can shorten your average age of credit and ruin your credit score.

Use the right kind of cards

There are many different types of cards made for specific purposes. If you have multiple of them, make sure you know which one to use each time. For example, if you’re planning to go out of the country, choose the one that offers the cheapest foreign transaction fees or one which has none at all.

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Take advantage of sign-up bonuses

Many banks are more than willing to offer huge sign-up bonuses to attract new customers with good credit, and you don’t have to do anything at all, especially if you have sparkling credit. All you need is to wait patiently for the best perks and apply only for those with exceptional sign-up offers.

Do not use it for everyday purchases

It’s fine to use credit when you have the cash as long as you buy only within the amount of cash you have and you pay for the transaction immediately. However, the problem comes when it’s time to part ways with the money inside your wallet and you become unwilling to let go. Furthermore, you’ll know the problem is worse when you used credit for basic purchases such as the groceries because you didn’t have the cash.

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Do not use it when you don’t have the cash

It’s simple logic. If you don’t have the cash to pay for your purchase, you can’t afford it. Treating your credit card as an extension of your wallet is one of the first signs that you are headed for credit trouble.

Do not make cash advances using your credit card

This is probably one of the biggest mistakes you can ever do with your credit card. This is one of the fastest ways to raise cash, but also the one with the highest interest rates. If you’re not careful, cash advances can put you in debt.

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