Credit cards are one of the best inventions till date and all of us enjoy using credit cards. You are not required to take cash and you can get anything at any place you desire. Credit cards are definitely our best friends, but it is important to use your credit card with responsibility otherwise you may land in a credit card debt in almost no time. Credit card debts are very common in students and it is the responsibility of the parents to teach proper credit card usage to their children. We are going to discuss some basic tips for credit card usage which will help students in staying out of any debt.
- Your credit card usage decides your financial future: There are some very important things that you need to understand about credit card payments. In case you are having some good amount of balance while paying minimum payment every time, your credit card will go down naturally.
- Stick to your credit card limit: It is very important to stick to your credit card limit so that you can use the available balance when required and it will help you in avoiding penalties.
- Avoid carrying a Balance: The best practice is to avoid carrying over any balance, it leads to a negative impact on your overall credit score. The compound interest phenomenon used by most of the banks will lead you to paying much more than what you have used till date.
- Limit your number of credit cards: If you are having more credit cards, it means more exposure of your financial situation and high numbers of enquiries represent financial problems that you are facing.
- Have a close look at your interest rate: Your balance increase according to the interest rate you are charged. In case you are having an alternative credit card with a lower interest rate, then it is best to transfer your money to that credit card but keep in mind that most of the companies increase the interest rate once the promotional period of the credit card is over.
- Pay your balance in full each month: It is important to pay your whole balance every month and in case you cannot, make sure that you are paying more than the minimum paying amount.
- Make the habit of carrying cash: It is observed that people tend to spend less if they are carrying cash and it is really good if you are leaving your VISA card at home.
- Set your personal limit for credit card usage and make sure to establish a new savings account which can help in times of financial crisis.
- It is very important to view your credit card balance sheet with maximum attention and in case of any error, inform your credit card company at the earliest. Always seek guidance of Your Personal Financial Mentor whenever you plan to apply for a credit card because he can guide you how to manage your credit card expenses and take effective decisions to avoid financial losses.
- Make sure you do not pile up a credit card debt when you graduate but if you do, you should be able to pay that after completing your graduation. ( Keep in mind the new expenses)
Categories: Credit Cards