How to Manage a Credit Card
Typically when we talk about credit cards we are referring to using the card that is given to you by a financial institution to purchase an item and then pay later.
Credit card loans is also known as credit card debt (because when you use your credit card you become indebted to the credit card company).
Having a credit card allows you to buy a whole lot of items as far as it is within the limit of your credit amount.
Most people use credit card mainly when they are out of cash or do not have enough money to purchase an item they want or need.
Reasons why people use credit card is that they sometimes do have the money for it but its convenient and security wise more safe for them to use it rather than cash.
It is very important to note that using credit cards are not cheap especially when you are not in the position to pay back the loan as an when it is due for payment.
Using credit cards the right way can be very beneficial to the user, just in the same way if you do not use it properly it can cause you a lot of problems with regards to your credit in future.
There are so many ways to manage a credit card and if these steps are followed it helps keep the credit card in check.
Some points to consider when managing a credit card
• Keeping within your credit limit
Sticking to your credit card limit is the only way to go since going beyond it will cost you a lot of money.
What credit card company’s do is that you are not charged on the amount of money you use so far as you are within your limit and pay back what you owe on time.
Apart from the fact that you will be paying more for the credit card if you go above your limit, it will also affect your credit history.
Having a bad credit history will in future affect your ability to get credit and even if you get it, at a much higher interest rate.
The best thing to do if your credit is not enough is to talk to your credit card provider to increase your credit limit so that you wont have to go above your limit.
With that being said, you don’t just go for an increment in your limit especially when you know you can not afford to pay back. That will cause you a lot with regards to your credit.
• Keeping your PIN secure
If you own a credit card the most important thing to keep to yourself is your pin number because that gives anyone access to your money.
It is not advisable to give or share your pin with anyone whether your spouse , friend or relative unless in an emergency situation.
Another bad idea is when you store your pin with your credit card.
This is because if your card is mistakenly stolen, you will be in big trouble since it will give the ‘thief ‘the chance to take all your money.
Unfortunately, if this happens the credit card provider cannot be held accountable for the loss of your money.
With regards to pins for credit cards its always better to change the default pin to one that you can easily remember.
Using your date or birth, or anything that is that can easily be known by a close relative is not advisable.
• Plan to pay off in full each month
The thing with credit card is that if you do not pay back the ‘credit’ given to you when it is due you will incur more cost.
Even if you do not use up everything on your card, it is very important to make repayment at the end of the month as agreed, otherwise, there will be charges on the money that has not yet been used up on your card.
To be able to understand fully how a credit card works, make sure to ask your provider all the necessary questions before you sign on.
When you have a better understanding of your credit card usage , you will be more careful to avoid extra charges.