A credit card is a powerful tool you can use to spend something on when you don’t have cash on you. Credit cards allow you to make big purchases that you usually can’t afford. What a credit card does, is that it takes the total amount you owe and it splits it up into convenient monthly payments for you to make. Of course, using a credit card always has interests on top of a purchase.  

Credit Cards reduce the need to carry around cash. In today’s time, it’s not normal for a person to carry around $50,000 in their pocket. It also helps if you have multiple credit cards. Most will say that having more than two credit cards is bad. However, most financial experts agree that having 3-5 credit cards is enough and won’t bury you in debts. 

Having credit cards also increases your credit scores. When you have good credit scores, you open yourself to faster loan approvals and better interest rates. Most credit card companies also have a rewards program for their clients who use credit cards responsibly. These programs often have discounts on travel, food, and amenities. Some even offer free items such as shoes and bags. 

It may sound all good, but having a credit card means that you also need to be responsible for it. If you’re just swiping away, indulging yourself with the purchasing power of your credit card, then you’re setting yourself up for excess debt. To help you stay clear from debt, here are some ways to help you use your credit cards responsibly. 

 

Avoiding Shady Online Transactions

In today’s time, online transactions are common. Most people often use credit cards to pay online purchases. However, criminals can easily steal your credit card and use them for their own purposes.  

There are lots of stories where clients end up reporting mysterious bills popping up on their transaction history. Most of the time, the people behind these excess spendings don’t get caught, and the victims are left to pay off massive amounts of debt. Make sure that you’re visiting a legit website before typing in your credentials to avoid any of these from happening. 

 

Pay Your Bills On Time

You must pay your bills on time. If you miss a payment, that may reflect on your credit scores. Having low credit scores can severely affect your way of life. For one, bad credit scores prevent you from future loans. If you do get approved, you’ll be plagued with unreasonable interest rates.   

Make sure that you pay your credit card bills on time to avoid getting penalized. Penalties with late payments often put an additional fee on top of your interest, making you pay more than you really owe. Avoid the hassle, always be on top of your bills so you won’t have to pay excess fees. 

 

Pay More

When you’re paying credit card bills, it’s a good idea to pay more than the minimum amount you owe. By paying extra, you’ll clear out your debts faster. Credit card providers will also see this as good behavior and in turn, will provide you with better interest rates, the next time you apply for a loan or use your credit card.  

 

Check Your Credit Reports

Banks that provide credit cards often have credit reports done for each client. As a responsible credit card owner, you should always check your credit card transactions and reports. Credit card providers such as Credit One and other providers work hand in hand with their clients with their credit card needs.   

Once you see your report, you’ll get an idea of the things you’re paying for. In turn, you get to plan a budget that enables you to pay off credit card debts much easier.  

 

Setting Credit Limits

As mentioned earlier, having multiple credit cards isn’t such a bad thing. However, maxing out all your credit cards is another story. With more credit cards, you’ll be tempted to spend more. To prevent that, always set credit limits to your cards. Adding a limit can dissuade you from impulse buying and save you the hassle of having to pay more. 

 

Takeaway

With great power comes great responsibility. This saying is especially true if you’re a credit card holder. Having credit cards allows you to purchase items even without real money on hand. You can also use credit cards for online transactions. As easy as it sounds, credit cards can also lead to excess debt. The tips mentioned above are just a few examples of how you can use your credit card responsibly and how to stay away from debt.