Getting a credit card marks a rather significant milestone in one’s life. Once you’re eligible to get that beautiful, small plastic card, the world seems to open up to you. From getting the latest phone to that trending game, you don’t need to worry about how much it costs; you need to get to a payment terminal (or an online checkout point), pay with “free” money, and get on with living your life!
Getting a Credit Card Is excellent — But It Isn’t That Cool!
I say that because getting your credit card also comes with significant responsibilities like interest rates and, in some cases, late payment fees. All this translates to is that if you aren’t careful with how you use your credit card, you could find yourself in a deep debt hole! That said, a credit card can be a beneficial tool as it makes getting the funds you need to live appropriately that much more accessible to you. To make sure that you only get the good out of this financial tool, some essential things that you need to remember include:
1. Credit Cards Don’t Give You Free Money
While it certainly mightn’t seem like it, you must never forget that credit cards don’t cough up free money. On the contrary, when you purchase a product or service with that plastic, you use money that the bank borrows. What’s more, depending on the type of credit card, the interest you’ll have to pay on that loan can be quite considerable.
2. Try To Pay Back All You Charge On Your Credit Card In Full
It is undoubtedly the biggest secret to use credit cards in a way you won’t regret. Usually, your credit card company will give you a meager minimum monthly payment value. And while this might give you the impression that you have some wriggle room, the truth is that failing to pay your credit card debt in full at the end of the month automatically attracts interest rate charges. By extension, the longer you leave even a portion of that credit card debt unpaid, the more money you’ll have to pay back at the end of the day. We can avoid this by ensuring you never charge more on your credit card than you can quickly pay back when the time comes.
3. Always Make Prompt And Timely Payments
Another trap you’d do well to avoid is making a late payment. Not only does making late payments automatically attract interest charges, but you also incur late payment charges and a host of other penalty levies!
Bottom Line
Used right, your new credit card will indeed be a lifesaver. However, if you aren’t careful, things can just as quickly go sideways. With the tips we’ve shared, you’ll be able to stay on the best course for your finances more easily!
