Tips on using your credit card responsibly

Tips on using your credit card responsibly

In the recent past, the use of credit cards has continued to gain popularity. This trend is an indication that people now understand the importance of a good credit score. According to financial advisors, a credit card is a way to go if you’re looking forward to promoting or revive your credit history. Credit cards are a convenient option to pay your expense. The fantastic thing is that they come loaded with perks and rewards. However, their benefits can never be felt if you misuse the credit card. Without saying much, here are some credit card tips from professionals to assist you to use the cards wisely.

1. Pay off the card monthly

As stated earlier credit cards come with awesome rewards and offers to the user. However, failure to pay your dues can see all the awards cancelled. It’s for this reason you’re always advised to pay your bills every month. Missing a payment can see you incur penalty interests, as well as, affect your credit score negatively. According to the card issuers, respecting the due date ensures that you continue enjoying your credit card offers and promotions.

2. Keep track of your activities

Using a credit card blindly can cause surprises whenever the bill hits your mail. It’s wise to monitor your daily operations to prevent such wonders, as well as, budget your earnings. Luckily, most card issuers allow their users to view their activities online. If your card allows this kind of arrangement, you shouldn’t hesitate to sign up so that you can monitor the transactions.

You can even register to receive online statements instead of the usual mail letters. The online statements are convenient and help keep your house scatter-free. However, if you’re the type that needs a physical report to remind you about the payments, this option isn’t for you. Online statements are easy to miss, especially if you aren’t active online.

3. Use the card for your needs only

Most credit card users have confessed using the card to acquire goodies that they regretted later. It’s for this reason that you’re always advised to use the card carefully. In other words, you must use the card for your needs only and not desires. Most of these unnecessary items are fun to buy but can lead to debts that which are painful to pay. Financial advisors always insist that one should set up an emergency savings account. However, you’re allowed to use your card to cater for emergencies such as mobile phone bills that are due before pay-day. But, you must remember to pay back as soon as you’re ok to reduce or prevent interest charges.

4. Go for a rewards card

Most people acquire credit cards for use in daily purchases. If you happen to be one of them, it’s advisable to go with a rewards card. As their name suggests, reward cards are the perfect choice for your daily purchases. Using these particular cards will earn you great rewards such as; retail points and cash airline miles among many others. Unless you don’t like free goodies, you must sign up for a reward card.

5. Avoid cash advances

Most card issuers offer cash advances to their users at the time of need. It is this property that sees most clients mistake the card for a bank, and it is wrong. It’s advisable to desist from asking loans from the card as the habit has painful consequences. Avoiding cash advances from your card is beneficial as its loans can be very costly when it comes to the fees. The fact that most card issuers don’t offer a grace period can worsen the deal. You should ask for loans from banks as they offer a wide array of loan options tailored to meet your needs. Some of which specializes in are loans without collateral. Although the newly-established bank doesn’t offer credit cards now, their loan packages can help you in those emergencies

6. Keep your credit utilization under 30%

As stated earlier, the main reason why people prefer using a credit card is to boost or revive their credit history. According to financial advisors, one of the best ways to improve your credit score is keeping your credit utilization under 30 percent. This utilization ratio is the percentage of total available credit that you’re using. Say, for example, your limit is $1000; you must keep your balance under $300 to be on the safe side. Often, it’s usually a challenge to stick to the ratio. But, with discipline and practice, the process becomes easy. Also, you must understand that the rate applies to all the credit cards you may have.

7. Plan for your debts

At times, the month may be rough to the point that you’re unable to clear your credit card balance. Well, the situation is common, and that shouldn’t see you make stupid decisions. During such months, it’s advisable to make at least the minimum payments to reduce the interest charges. Also, you must avoid using the card further to prevent the bill from piling up. According to the experts, you can even go ahead to put away the card until you’re well off or able to pay the new charges.

8. Avoid sharing your credit card account

Well, the statement sounds mean, but it’s a step worth taking. Having multiple cardholders on a specific account is recommended, especially for married couples. However, this sharing can lead to problems, when one of the holders has terrible spending habits. He or she can increase your spending limits or incur debts.

Sadly, the weird spending habits impact your credit score as long as the two of you share the credit card account. Such scenarios have also caused conflicts among couples and even break-up. Therefore, unless you’re both disciplined when it comes to spending, you must always avoid sharing a credit card account with anyone.

9. Be smart with the offers

Almost every card issuer has promotional offers in place to help grab the attention of new customers. Besides, the offers are meant to woe the existing customers into using their cards more often. As stated earlier, most of these deals are beneficial to the card user, and hence you must make use of them. However, you must be careful when going for a promotion or offer. You must ensure that you understand all the terms in place to prevent putting your credit score at stake. Also, don’t fall for the trap of buying unnecessary items all because of a special offer.

The use of a credit card has been categorized as one of the best ways to improve or revive one’s credit score. What many people don’t understand is that building a credit history while using a credit card is a process and that takes time. Listed in this article are nine pro tips to help you use your credit card responsibly and enjoy a good credit score. If you jumpstart the process with these tips, you won’t have a challenge repairing your credit score even in the future.

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