Credit cards can be a very useful tool and make our lives easier in many ways, as well as they can sink us and make us enter into very difficult financial situations. So how do we stay alone with the nice part? Everything is in the use we make of this great tool.
Next, know the five things you should not do with your card because they simply push you to perdition.
Use it as an extension of purchasing power
If every month you cover a portion of your expenses with your credit card, you are spending more than you have, which will hurt you when you have to pay the bills. Use your card wisely and not to cover the fixed budget, unless you pay everything before the installment expires.
Not knowing the point system
Many cards accumulate points for each purchase and these are used to redeem different benefits. Even, many are associated with airlines to accumulate miles for a certain amount of purchases made by the user. Find out about the benefits that your card gives you so you can take advantage of them and make the most of the points system that corresponds to you. You may have many accumulated points and you will want to use them before they are lost.
Always pay the minimum
If every month you make the minimum payment of the fee that you had to cover, it takes a longer time to cancel it, which causes the interests to produce an even greater expense. Always seek to pay the total debt each month.
Defer to more than one fee
When paying with the card, they always ask us in how many installments we want to cancel the purchase and many people choose terms between 2 and 36 months, which means that this purchase – however small – will generate interest during that number of months. Ideally, you can buy with your card what you can pay in full at your next court and thus, you will not pay interest (purchases at a fee do not pay interest).
And if you make international purchases (which banks normally defer automatically to 12, 24 or 36 months), as soon as you return to the country or on your next invoice, make an extraordinary payment by canceling the total, that way you will avoid paying many months of interests.
Not knowing your credit terms
If you don’t know what the interest rate the card gives you, what your benefits are or when your cut-off date is, then you need to start knowing that data in the shortest possible time. Find out about everything that involves your credit card, as it is the only way you can get the most out of it.
Remember, in addition, that it is always good to have the options open since the institutions are willing to offer different benefits, including a low driving fee or even eliminating it. So you can compare what institutions offer you if you are thinking of changing your credit card.