Credit cards, if used properly can provide great convenience and excellent cash flow of interest free loan from month to month. But very few consumers use credit cards in such a way. In fact, the credit card issuers themselves look for consumers who can be blamed as irresponsible with their use of the cards and they start racking up huge levels of debt and paying staggering amounts of interest in the process.
Most people have piled up unpaid bills mainly because of mismanagement and carelessness. If you have mismanaged that plastic card, you would need a lot of hard work to get your debt back under control. Thus, you must learn to use your card wisely. Here are few do’s and don’ts:
Things You Shouldn’t Do
Do not apply for any credit card unless you thoroughly read its terms and conditions. Choose a credit card that involves more than liking its design or card issuer. You must evaluate the credit card based on the fees, the interest rates, and the rewards. Try to compare the credit cards with each other and even across credit card issuers. This can be a good way to check whether you get the best deal or not.
Do not use credit cards to make daily purchases. Simple regular items like clothing, food and gas should be out of the list. If you are using it as a replacement for cash, it is a bad habit and can further lead to debt. When going for ordinary items purchases leave your credit card tucked in the wallet and better start using debit card or cash instead.
Do not use your credit card and buy heavily expensive items. If you live a life with the habit of borrowing, it is the fastest way you can enter the chain of debts. Furthermore, if you are unable to afford any thing’s purchase today, chances remains that you might not be able tomorrow as well, or even next month for that matters.
Things You Should Do
Be wise and practical when you take decisions about necessity and luxury. Go for things that you just need badly. Be responsible enough and use your credit card; that means you should be able to recognize the difference between what you need and what you just want.
Give your creditor initial intimation that you will not be able to pay your payment of the month in the right time frame. Simply call your creditor and briefly explain the situation.
Negotiate at an interest rate that is lower, especially when the current rate is greater than what you are receiving. That determines your pay to carry a decent credit card balance. Try periodical evaluation of the credit card’s interest rate to ensure the best deal possible.