It is easy to apply for a credit card but using it requires control and discipline. If not used properly, this can cause financial trouble on your end, and you might even end up in huge debts! If you are a credit card owner, read on the following tips on using your credit card wisely and using it to your own advantage:
1. Take advantage of reward points. Credit card providers offer a slew of benefits that most people don’t take advantage of like the reward points. Every time you make a purchase, you earn reward points. You can accumulate these reward points in exchange of special items or other offers such as discounts on airline tickets, gift certificates, hotel accommodations, and a lot more.
2. Use it for your needs. Always identify the thin line between your needs and wants. As much as possible, use your credit card for your needs rather than your wants. For instance, use it to purchase your groceries, your fuel, and any other items that you would normally use your debit card for. The more you spend, the bigger the rewards you get.
3. Use but don’t abuse. Do not use your credit card to pay for that next shoe purchase just because you want to. Try your best to resist on swiping away on an item that you think is a mere want of the moment, especially if you think it is out of the budget. Make sure you purchase something that you will be able to pay on the next billing.
4. Pay in full and pay on time. Whenever you have credit card debts, make sure to pay it in full and on time. Although they normally suggest a minimum amount to be paid, be wise enough not to follow it. The basic rule is “never carry a balance”. Any unpaid dues will completely erase you’re your rewards. Remember that credit card companies earn from charges they inflict on every delayed payments. So when you fail to pay your bills on time, be prepared to add in a few hundreds or even thousands for late charges and possible interest. Keep track of your purchases. Always keep the receipts of your credit card purchase. If you have a small notebook, write down your purchases and use it as a cross-reference to your next billing statement.
This will give you an idea as to how much you have accumulated so far so that you won’t be surprised when you see your bill at the end of the month. You can also use that personal list to dispute incorrect charges.
There’s nothing wrong in getting a credit card. It is meant to help you make purchases fast and easy, especially in case of an emergency where you can just use it right away. But you always have to remember that getting a credit card entails responsibility. Credit cards are worth it if you pay your bills on time. Do not use it to splurge on anything you want to purchase but use it wisely to ensure you get the most out of it.
This is a guest post by Rhea Mocorro, the “kuripot pinay”. Kuripot Pinay is a blog advocacy of Rhea, sharing her personal finance experience and her thoughts on financial freedom.
The views & opinions expressed in this special guest post are the author’s and do not necessarily reflect the opinions & views of MoneyMax.ph as a whole.
With a goal to help Filipinos lead healthier financial lives, Moneymax regularly publishes tips and tricks on personal finance and lifestyle, among many other topics. For more finance-related news and articles, follow Moneymax on Linkedin.