Credit card. Three words that can end up turning that plastic piece into a financial nightmare if you don’t know how to use it well. And is that credit cards can be a great help for your economy or become your biggest problem if you do not know how to handle them. The first thing you should do when one falls into your hands is to burn yourself to fire this maxim: although it is money that you have available it is not yours, it is from the bank or company that lends it to you and then you have to return it. Having this clear you will save more than a headache. Here are some situations where you should use credit cards or not.
Do not use the credit card when
Following the maxim that it is not your money, you should not use the credit card to pay monthly bills, except for specific times. If every month you see that you have to pull a card to pay for electricity, water, telephone, etc. is that you are spending more than your budget allows you and you should sit down, calculator in hand, and see where you can cut. The card can be a timely help for that December gas bill that is higher than normal, but don’t take it as usual. Do not use it either to pay a mortgage term because what you will be doing is adding more debt to the debt. In this case it is better to talk with your financial institution to see what you can do to face or defer monthly payments.
Once you have assumed that this card money is actually a loan, the next thing that must be clear to you are the dates of the billing period and the payment due date. That is, when the bank will charge you. This will allow you to make your accounts and if you need to buy something you can do it at the best time of your credit cycle. This is in the first days of the billing period, in order to have almost a month and save and cut costs to pay. It is very important that you do not miss the expiration date if you do not want the bank to charge you interest.
Yes you can use the credit card
The credit card is a good option to buy in installments a more expensive good than usual or to pay for example vacations. Of course, always taking into account that you can meet the fees. Use it to buy a trip or plan ticket if, as in many cases, the card has insurance that will allow you not to have to hire other travel insurance to deal with possible unforeseen events. It is important that you read all the fine print and know the benefits you can get by owning a credit card.
Online purchases can also be made with a credit card. Remember to always go to pages that have verified payment security. But if unfortunately you fall into one that is a hoax, the damage will be less if the credit card has a maximum limit of money available, something highly recommended for these cases.
As you can see, a credit card can be a great ally to buy something you need or face an extra expense, but it is in danger if you get used to using it to spend more than your monthly budget allows.
And remember that another option to credit cards is to directly request a personal credit that you can have directly in your account, use as you wish, and return in convenient terms.