Credit cards can work for you or against you. Depending on how you use your plastics, it could be a source of good credit standing or loan rejections in the future. People have innate love for shopping. And when they got their credit cards with them, it seems like they have superpowers to purchase anything or everything they want. Sometimes, this confidence can trigger impulsive buying.
Use Credit Card For Convenience, Not For Credit
Your credit card is there as your secondary means to purchase. You carry it around and use it because it is more convenient than having a wallet filled of cash especially when making big purchases. If you are not the “cash” type of person and predominantly does all transactions online, then credit card is advisable. But never ever use it for credit—for wanting to buy something you cannot afford now but you think you can pay for later. Do not give into the whisper of your impulsive-buying self. You may end up drowning in debts.
Pay On Time and Full
Heard of finance charge? This is the interest rate you incur every time you do not pay the full amount you owe. This is one of the biggest nemeses of payers. Moreover, it does not have a standard value, it depends on how much the total billable amount. Consequently, the rule of thumb applies: the higher the amount you need to pay, the higher the finance charge for every day you miss paying. Treat your credit card bills as your utility bills that have to be religiously settled.
The 0% Installment
Do not get lured into 0% installments if you use your credit cards. This gives you this invisible confidence that you can pay for it. These promotions are made for you to swipe as much as you can, but this does not make your purchasing power stronger.
Live Within Your Means
Perhaps this is the most important rule of all. Knowing your capacity and living in frugality will save you from debts. These debts that can vastly affect your credit standing and be a huge factor in your future loans and job applications. Spending on luxuries from time to time is okay. Just summon enough self-control to ensure that you do not go overboard. To live a simple and debt-free life is an ideal setting, and can actually be achievable depending on one’s will power.