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It is easy to get into trouble with credit cards. It may seem like free money – but it is actually more expensive money you just haven’t paid for yet! Credit cards are still around for a reason though, and if used responsibly they can actually be quite an asset by helping you build up your credit score. Here are 4 tips that will help you in using your credit card wisely.
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Know your limit
Don't go over using 30% of your credit limit. Your credit score will be seriously impacted by the amount of debt that you have. Keeping a low debt balance keeps your credit score high.
Know your interest
Make sure your credit card has a reasonable interest rate. Shop around for the best deals. If your credit card company ups your interest rate, call and complain and ask for a lower one. Explain that you are a good standing costumer and deserve to be treated like one.
Before you buy, make sure you can pay
Don’t buy things that you otherwise wouldn’t be able to afford. Always ask yourself before using your credit card if you can pay the balance off at the end of the month. If you can’t, you will begin to rack up debt. Instead of purchasing things you don’t have the money for you should save for these items. This way you don’t accumulate debt and if you have to work to save the money you most likely won’t spend it on an impulse buy.
Pay off your balance every month
Pay off as much of your credit card debt each month that you can. It is best to pay off the whole thing, but if you can’t, pay off as much as you can afford. Only paying the minimum payment each month actually increases your debt because of the interest that piles up.
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