At some point, almost everyone will need to use a credit card. Credit cards are a necessary tool to help individuals build up their credit score, which is key for individuals who want to apply for a loan, a mortgage, or so on. However, many people are understandably hesitant about using a credit card. No one wants to potentially risk dealing with overwhelming credit cart debt. How can you effectively use a credit card without having to worry about debt or excessive fees? Here’s our tips for using a credit card effectively and safely.
Shopping Smart with a Credit Card
It’s also important to consider your shopping habits when using a credit card. Avoid buying things you wouldn’t usually buy without a credit card. For example, if you need to build your credit score you may want to consider buying groceries or household supplies with the credit card. Because it’s something you’ve already budgeted for, it’s easy to pay off the credit card later while still building your credit score. Buying overly expensive items that are out of the norm for you simply means you’ll have to spend more time paying off the debt in the first place.
When shopping with a credit card, it’s still important to be mindful about discounts and saving money. The less you spend with your credit card, the less you’ll have to pay back later.
Paying attention is key to using a credit card effectively. Be sure you’re clear on the interest rate and terms that go along with your card. Once you receive your card, be sure to review the terms and conditions before you even pop the card in your wallet. Keep a copy of the card’s terms and conditions handy so you can review them later.
You’ll also want to pay attention to the card’s credit limit. If you’re young or have a relatively new credit history, you’ll likely have low credit limits on your card. It’s important to never exceed the credit limit on your card. Make sure you have the clear idea of when your card’s monthly payments are due, so as to avoid any fees. Most major credit card companies offer apps and online tools, making it easier to check credit card balances on the fly.
Paying Off the Card
All credit cards have a minimum payment you’ll need to make each month. Paying on your credit card every month is imperative. However, if possible, you’ll want to make sure that your payment is at least slightly bigger than your minimum payment. Paying only the minimum payment can mean that it’ll be very difficult to pay off the card, especially over the long run.
Paying off your credit card debt as soon as possible is advisable. If you have to, take a break from using a particular card if you’re having trouble paying off the debt and managing new charges to the card.
Keeping Your Card Secure
Another concern that many people have about using credit card is ensuring that their credit card information remains private and secure. Many people have had to deal with credit card fraud and identity theft.
In order to keep your credit card information secure, you can put out a credit alert on your account. This ensures that any time you or someone else tries to open a credit account, additional information needs to be provided, usually over the phone. Be careful about who you provide personal information or credit card information to. Only use credit cards on websites you trust.
Don’t ever use credit cards on networks you don’t feel are secure. Save your online purchases for home or consider investing in a VPN.
If your information is compromised, get in touch with your credit card company and figure out how you can stop your information for leaking out.
Summing it Up
Using a credit card doesn’t have to be intimidating. Ensure you’re making your purchases intelligently and carefully. Always make sure that you’re keeping your credit information secure. Pay your credit card off as soon as possible and avoid making unnecessary purchases. Using a credit card is one of the easiest and most rewarding ways to build up your credit history. Charge your card responsibly and you’ll be on your way to using your card smartly and effectively.