Despite being so many, most people don’t know how to use a credit card either because of bad management or they are afraid to use it. Let’s not forget that they are financial tools and to fulfill that function, it is better to know what needs to be done so that at no time does it get out of control.
Before knowing how to use a credit card, let’s know what it is:
I know, we should have seen this lesson a long time ago, but we must make it clear that:
A credit card is equivalent to an amount that the bank provides, sometimes based on the level of income and good credit history. You can use it in established merchants that are affiliated with payment processors.
Now there are many people who fear credit cards for knowing other people’s experiences, or for fear of mishandling them, but let’s see how to use a credit card without borrowing:
Make sure you have the one that works best for you
When the bank offers you credit cards, make sure that the use you are going to give is really of your benefit and you will take advantage of the credit. In the market there are banks that offer you a variety of cards, an example may be travel cards that give you benefits on travel tickets and / or purchases made if you are a person who travels constantly. Have the one that best suits your needs.
Limit your expenses
The first thing that we have to understand about how a credit card is used is that it is NOT extra money that we have to be able to spend on anything, since we think that by having the plastic we can buy anything at any time and that in the end To make the payment the cost is greater than our income and we end up immersed in having to pay an amount greater than what it really cost.
If we have a monthly income of $ 13,000.00 and the credit limit on our card $ 10,000.00, it is not that we have to spend 23 thousand pesos, to spend monthly.
Pay on time and form
It contemplates that the ideal is that the total consumption is paid on the date of payment so that interest is not generated.
Example We buy food from January 22 and then on February 10 we buy some $ 560 shoes, what we have to pay before March 9 is $ 810.00, whether it is deposited in full or partial payments.
Since if you only pay the $ 510.00. the bank will charge an interest of $ 300.00 and the following month the new expenses generated would have to be paid plus the 321 pesos that we do not pay and this can generate indebtedness.
Never choose to pay only the minimum
As we know, after making our purchases the bank provides us with a minimum to pay monthly, which we should not contemplate in this way, since we will take longer to liquidate and the real cost of purchases increases; this, because the minimum payments as the name says, a minimum part goes to the capital and the rest is to cover interest. At the end of the day it is more expensive and does not turn out to be a benefit.
Avoid using your credit card as if it were debit
Most banks provide you with the option of being able to make cash withdrawals that you can use for an emergency or some cash payment, contemplate that this amount should be covered on the payment date to avoid generating additional interest for the provision cash.
Try not to exceed your credit limit
This is a very important point to consider as account holders of any credit card, we must take care not to consume the total credit available on our card, since this could be interpreted as a lack of liquidity.