Are you new to the world of credit cards? Owning a credit card comes with financial power, as well as responsibility. By adopting good habits and understanding how credit cards work, you can position yourself for a better financial future.
Keep the following tips in mind next time you go to swipe your card:
- Be mindful of temptation
Overspending with credit cards can be tempting, especially when they allow you to make purchases beyond what you could afford with a debit card. However, be cautious. If you can’t pay off your credit card balance at the end of the month, things can spiral out of control quickly.
- Pause before purchasing
Before making a purchase, try to wait at least 24 hours – this can help prevent impulse buying. Consider whether the purchase is a genuine need or just a want. Think about the long-term benefits and whether it and fits in your budget so you can comfortably pay off your credit card bill.
- Avoid cash advances
While credit cards offer cash advances, they can come with high fees and interest rates. Choose other sources of funds, such as different types of loans if you need credit rather than using your credit card.
- Pay your bill in full
Each month, you’re required to make a payment on your credit card. If you don’t pay the entire amount, the remaining balance carries over to the next month, along with the added interest. Aim to pay off the full balance whenever possible to avoid accumulating interest charges.
- Avoid missed payments
Regularly missing credit card payments can harm your credit score. To maintain a healthy credit score, pay at least the minimum amount due by the due date. Ideally, pay the full balance to keep your credit score unaffected.