These days a credit card is a part of everyday life for most people and handing over a card to pay for goods and services is all too easy. Unfortunately it is also easy to forget that it is real money you are spending and that not only are you entering into an agreement with the provider to take repayments from your bank account, you are also agreeing to repay more unless you repay in full within the month. Here are 7 sensible ways to manage your credit card.
1. Get the Best Card You Can
Make sure you get the best credit card offer for you in the first place, do your homework. Check the terms of the card, be aware of the interest rate and any late payment fees, card holders annual fees etc. If you are transferring a balance in order to take advantage of an interest free period, make sure that you will have the balance paid off before the end of the offer period. Failure to do so could involve some very high additional fees and interest payments.
2. Be Sensible about Rewards
Take advantage of reward schemes, but don’t overspend just to get them. You are likely to end up spending more than you intended and having more interest to pay and more debt than you need. Remember that reward schemes are there to tempt you into spending on you card. If you are going to end up in more debt, or paying higher interest payments, is it worth it?
3. Make Sure You Can Afford the Repayments
One of the most sensible ways to manage your credit card is to plan the repayments especially when you use the card for expensive items. Having a large credit limit doesn’t necessarily mean you can afford to max out the card. Work out how long large spends will take to repay, and how much interest will be added. Is it still a good deal?
4. Keep an Eye on Things
Always check your statements, and your spending. A sensible way to manage your credit card is to keep a note of what you have spent, when you spent it, how much it was and where it was purchased. If you see something on your statement which you haven’t authorised, report it to the card provider immediately. There is a greater chance of you being reimbursed by the card provider, and less chance of it being repeated if there is a security issue.
5. Save Some Credit for Emergencies
Leave some spare credit on your account and don’t spend up to your limit. This ensures you have something in reserve for Emergencies, and also helps keep you credit score good.
6. Stay Secure
Be vigilant when it comes to security. Never give out details of your card or PIN numbers. Be aware of people around you when using you card. Never give your card details over the phone in a public place. When using the internet don’t use a shared computer, make sure the site you are using is a secure one. Make sure you have up to date virus protection and firewall on your own computer.
7. Beat the Interest
A very sensible way to manage your credit card is pay back more than the minimum amount. Remember the longer you use the credit the more you pay. If you only make minimum repayments you will be in debt for longer and will pay much more back in interest. If you can make the minimum payment in the first month continue to repay at the same rate you won’t notice you are paying more but the debt will reduce more quickly and you could save a lot in interest over a period of time.
If you follow these 7 sensible ways to manage your credit card, you will find you pay minimum costs for your credit. You will always get a good deal and you will save the maximum you can, you will also retain a good credit rating.
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