Financial Planning: Tips On Credit Card Usage

To some people, credit cards are the best things to happen since sliced bread. Having a credit card is indeed very convenient because it makes carrying a lot of cash unneccesary. Most of us will not leave home without taking our credit cards along with us. But, as with most things in life, the advantages of having a credit card(s) come with a price. Since you can always buy things without carrying cash around, you are always tempted to buy things on impulse which you might not necessarily need. If you have excellent control on your finances, then good for you. If you have a hard time managing your credit card, then the following pointers can help you:-

Get organized
First things first, obtain your credit card records to have a better idea of your spending habits. Be sure to double check the records for errors and ensure its accuracy. A good example would be to find out if you have outstanding debts that should not be there as well as the accuracy of the listing of your former and present address.

Evaluate your credit card
Go over your recent credit card records and look at the interest rates. Some credit card companies have promos wherein they offer lower interest rates for a period of time and this promo may already be over yet you have no idea and are already paying at a higher interest rate. Also take note of the membership fee which they charge annually since some have very high membership fees. Consider cancelling this if you are not using it frequently.

Pay on time
It is important to pay your bills on time since it can have a negative effect on your credit record or rating if you don't. You will also be able to avoid getting charged because of not paying on time. Try asking the credit card company to remove the overdue charge if you have forgotten to pay it on time for the first time.

Manage your debts
If you see that you have more debt than what you can manage comfortably, think ahead and plan out how you will repay it entirely or at least reduce it as far as possible. Devise a way to pay more than what is required of you so that you will have a reduced payment schedule. Prioritize the card that has the highest interest rate. Unless absolutely necessary, do not bring your credit card always when you go around since temptations abound.

Don't bite off more than you can chew
As the saying "don't bite off more than you can chew" goes, do not spend more than you can afford. True, a beautiful gold bracelet or a branded gold watch may give you moments of pleasure when you have the occasion to wear it, but the price tag may mean paying a lot for the next months. If you are bent on saving money when using your credit card, unnecessary items like jewelry and the like should be at the bottom of your considerations.