Credit Card: Effective Usage Tips

How to Use your Credit Card Right

Credit cards can be of tremendous help when you don’t have enough cash and need to buy something urgently. But, people often forget that along with the advantages of having a credit card, there are disadvantages as well. Find out what they are and learn how to use yours properly.

We sometimes don’t use a facility judiciously and this is what lands us in trouble. Facilities like credit cards are designed so that we can buy things when we don’t have cash. However, instead of taking the pains to use them wisely, we forget that they come with risks.

Some of the Pros and Cons of Having a Credit Card

1. If You don’t keep Your limit low, You Could Go Broke!

How much you use with your credit card should always be proportionate to your income. A simple rule to keep you from suffering the disadvantages of using a credit card is to limit your spending to not more than 20 percent of your annual income. It’ll prevent you from racking up huge bills that are tough to pay off.

2. Making Payments on Time can Boost Your Credit Rating

Even with care, it’s sometimes easy to get stuck in the trap of loans. But where credit cards are concerned, you can balance your debt-to-limit ratio and make payments easier. Using your credit card wisely and always clearing payments on time will also make it simpler to apply for loans as your credit rating will stand you in good stead. This is one advantage of having a credit card and using it properly.

Making payments on time can boost your credit rating

3. Identity Theft is A Real Issue

It’s very important to practice credit card safety tips. Always try to use services that provide you surveillance and credit monitoring. Internet scanning services check websites where your personal information can be at risk. These services monitor changes and can look for any unusual activity in online transactions. Such companies also tell you how to keep credit card information safe through regular tips and updates.

4. Spend Wisely, Save Money!

To enjoy the benefits of having a credit card, always carry cash and limit spending to cash payments as much as possible. Knowing that you’ve just spent Rs. 500 on a haircut and are left with Rs 1,500 to shop for groceries can help you spend money smartly. Even if your friends are all about using no cash, don’t go with the flow. Be the smart one and follow these credit card usage tips!

Credit cards can be your friends or your enemies. Rather than viewing them as free passes to spending without abandon, practice how to keep your credit safe and how to use it wisely. See it as a backup for cash and always remind yourself not to go beyond a limit. Use it to your advantage, but don’t take advantage of it!

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