Credit cards offer the privilege of purchasing items today and paying for them later. While this arrangement gives ample time to prepare for your dues, it also comes with risks. This bargain means that for every purchase made on account comes a liability; when one fails to settle it on time, consequences will surely follow.
Let’s review the dos and don’ts of owning and using a credit card to avoid these repercussions:
What To Do
Review Credit Cards – Think of it this way: different banks, different credit card terms and conditions. They will and always vary in interest rates, allowable terms, annual fees, and credit limits. Choose the one suited to your lifestyle.
Ask Questions – Never hesitate to raise your concerns and ask questions. This way, you will understand more about the terms of your credit card, statements and dates, security matters, and more.
Set a Budget – Planning your credit card purchases and future settlements will help you control your spending and keep your finances organized.
Be Mindful of Dues and Due Dates – Bank statements are sent through your email monthly, so check them regularly and pay your balances on time. You’ll thank yourself in the future for improving your credit score.
Secure your Card– Your credit card can be as vulnerable as your money. Keep your card issuer’s number so you can immediately report should you lose your card.
What To Not Do
Do Not Feel Pressured – If your friends or agents pressure you to sign up for a credit card, learn to say no, especially if you don’t need it. Don’t let them lure you with the many benefits of having one; you’re in charge of your finances, not them.
Do Not Neglect Warnings – Credit danger happens when you pay only the minimum acceptable payments or settle late. Don’t fall into this trap.
Do Not Apply for Multiple Accounts – Opening too many credit card accounts can damage your credit score, especially when dues pile up one after the other. This can lead to a declining credit score and disrupt your finances.
Do Not Apply for Multiple Accounts– Just because you have a 6-digit credit line doesn’t mean you have the same amount to spend carelessly. It’s not about your ability to settle on time, but how you manage your budget and payment methods and keep yourself away from surprise dues.
Do Not Max Out Your Credit Limit – Unless you have to pay for a legitimate transaction, never disclose your card number and security codes to anyone. Scammers and thieves are everywhere, so keep these details safe.
Owning a credit card will have its perks: entitlement, privilege, payment flexibility, and accountability. Using these means you vow to be a responsible user and understand the repercussions should you fail to comply with their coupled conditions. These do’s and don’ts are only a few reminders to keep in mind once you finally hold your first credit card.
Keep learning. Your credit card – and wallet – will thank you.
