Simple Guidelines On How to Use Your Credit Cards Rationally
Most of us (ordinary people, who are not specialists in the field) know little about how to use credit cards wisely and rationally. Whereas there are several guidelines that can help to develop healthy spending habits and avoid getting deeper into debt. Though it’s preferable to learn them prior to starting using credit cards, these guidelines can be quite helpful to experienced credit card users as well.
Don’t use your credit card:
- to cover such everyday expenses as food, gas or clothing, but use cash or debit card instead;
- to purchase things you can’t afford today and there is little if any chance you’ll be able to afford in the nearest future – living this kind of borrowed life is the shortest way leading deeper into debt.
Develop the useful habits of:
- making more than minimum-only payments: if not, you will increase the period of your debt repayment time and will end up paying higher interest;
- closing out your credit cards wisely, only after learning how your credit score and credit history will be impacted by doing so: the simplest recommendation here is to avoid closing cards with balance of them, particularly if those cards make up a major part of your credit history;
- informing your creditor in advance in case you can’t make the monthly payment on time: this way you will be able also to ask for your late fees being waived;
- discriminating between the two meanings of “I need” , when intending to buy something: a) what you really need; and b) what you just want so badly;
- keeping lower balances – within 30% of the credit limit – which are easier to manage and will also help you to maintain a better credit score;
- evaluating the interest rate of your credit card regularly and negotiating a lower interest rate in order to get the best possible deal for you.
