How to use your credit card? 5 tips
When it comes to using them, for many, credit cards are quite dangerous and, most of the time, they are a source of concern since, difference of a debit or prepaid card, when using money that is not yours, it is very easy to buy, spend and accumulate debt.
For this reason, if you have a credit card and want to learn how to use it wisely, in this post you can find 5 tips so that you can keep your finances safe and learn how to use your credit card. without dying in the attempt.
5 Tips to use your credit card
1. Choose the right card for you.
With so many card options, it’s important to find one that suits your financial needs and your lifestyle. For this reason, before choosing the best card for you, it is important that you research and compare the different solutions offered by the market, taking into account options such as: cash back, discounts, low exchange rates for withdrawals abroad.
Also, keep in mind that banks know that not all have the same degree of risk and that is why they continually develop card offers that are specific to the creditworthiness and financial needs of the applicant.
For this, the advice is to choose the level that best represents your credit profile..
2. Keep your card balances low.
If you have a good credit score and, for this reason, your bank has assigned you a high credit limit, let’s say 15,000 euros, this does not mean that you have to spend it all.
If you want to maintain your credit score, it is recommended to use 30% of your total limit or even less.
3. Avoid interest charges by paying your balance
This point is directly related to the previous one. Let’s say you fail to comply with advice n.2 and, instead of being careful with expenses, you cannot pay for all your purchases before the deadline. If this happens, the bank will charge you the APR (annual percentage rate), that is, the amount of interest that the credit card issuer will charge you each year for not paying the balance.
So the best thing you can do is pay the accumulated debts with your card every month, for example, reserving an amount of money from your checking account every weekend to cover your weekly purchases and not spend more than what you have available.
4. Track your purchases
OAnother very useful custom is to keep track of your purchases throughout the month. In this you can help with the App of your bank connected to your checking account or another app to help you manage your personal finances.
When you see that you are about to reach the credit limit, avoid using the card until you have paid off the balance.
5. Do not apply for credit that you do not need
After reading the above points, make sure you are in a solid financial position to apply for a credit card and ask yourself if you really need one.
If you don’t feel completely confident about being able to make regular payments, you may want to look into other financial options, such as a personal loan.
And, of course, go ahead and use another type of card that helps you avoid debt, set budgets and spend only what you can afford.
Well, if you have not yet been lucky enough to try one of the best prepaid cards, do not wait any longer and get a Bitsa, the card that allows you to buy on the internet or in any business, without being linked to a bank account.
And now use it too paying through your mobile or smartwatch!