Responsible use of credit cards

For this reason, if you use this method of payment on a regular basis, it is important that you take into account certain rules that will help you make the best use of your card and avoid falling into indebtedness using capital that you will not be able to return later.

 

Choose your card well

Choose your card well

There are suitable cards for every need and consumption profile. Keep in mind the basic criteria for choosing a credit card: free or with low maintenance and renewal costs, with the lowest possible interest rate and low overdraft fees. Always be clear about all the associated conditions and the costs incorporated.

 

Control your expenses

Be responsible from the beginning. You must write down and check all receipts and make a budget with your monthly fixed income and expenses, that is, know your economic situation so that, even if an unforeseen event arises, you can settle your debt with the credit card.

 

Set a card limit

Set a card limit

Before making a purchase, consider if you really need to make it. Do not use your credit card to buy things that you really cannot afford. The possibility of setting a daily or weekly limit helps to control your monthly expenses made with plastic money. The goal is not to overdo purchases with money that you don’t have in your account. Do not increase your limit if you are not sure you can assume it.

 

Consider interest for deferred payment

 

As we have said before, credit cards offer two modalities: payment at the end of the month or fractional payment. When planning the budget for future months, it is essential to know what interest you will have to pay if you reimburse the capital in monthly installments, to ensure that you are able to do so. When you can, pay the entire balance.

 

Do not finance your long-term purchases

Consider interest for deferred payment

It is normal to use the credit card to accumulate purchases and pay all of them at the end of the month without incurring an extra cost. However, some people use it as a form of financing, progressively paying monthly accumulated debt of their purchases. In this case, you should be very careful, since the interest that accrues is usually high. That is, credit cards are not a good solution to finance your long-term purchases.

 

Do not pay the debts of other cards

Try not to use a credit card to pay off the debts of others, nor should you accumulate new cards when you have completely exhausted the balance of existing ones. If you use up your card balance, you should stop spending, cover the deficit with savings, or ask for help. If debts are causing you problems, get help as soon as possible. Think about consulting a credit counselor who can help you get out of debt.

Making proper use of credit cards means having a better financial health, taking better advantage of the credit instrument, organizing your finances better and maintaining a good relationship with the financial institution for future credits.