A credit card can be an ally for your finances if you know how to use it wisely, however, if you are not aware of the responsibilities that come with acquiring one, more than an ally you can become an enemy that indebts you for a long time and damages your credit history For example it is unforgivable that you use a credit card to finance your business , it would be very expensive!
It is important to have some financial education to take advantage of a credit card and avoid the risks that these can bring. Meet tips that will help you use a credit card safely :
Don’t have too many credit cards
When you buy a credit card, it is common for many banks to call you to offer you more credit cards with higher amounts or with “more benefits”.
It is recommended that you avoid having more than two credit cards available to avoid inappropriate use, this prevents you from using more than you can afford and delaying your monthly payments due to having different billing dates.
Don’t buy on installments without knowing your finances
Knowing your personal finances is important to safely use your credit card.
By knowing them you will be able to know how much money you have per month to pay the debts that you acquire with your credit card if you use the method of paying in installments or installments.
Never pay the minimum
When the credit card account statement arrives it is possible to notice the total amount to be paid in the month and the minimum amount.
It is always preferable to pay the total amount since the minimum amount only represents, in many cases, 5% of the total debt plus the interest and fees of the bank. It is also important to never exceed the payment deadline to avoid late payments.
Do not confuse your credit card with a loan
Many people end up financing their trips, businesses, etc. With your credit card. This is not recommended because the interest rates of a credit card are not low. It is preferable to opt for a personal loan that has a lower interest and a fixed monthly amount.
Never opt for the cash provision
Many credit cards offer cash provision. The idea is tempting because you have money immediately without paperwork, but it is not recommended. The interest rates of the cash provision are higher than those of taking out products or paying services in installments, and many times they can double the initial amount. It is recommended to opt for this modality only if the total withdrawn will be paid in a single installment.
Follow these tips and see how you can use your credit card without risk. Return your credit card your ally and not your enemy!