Having a credit card can be very convenient in a sense that you will be able to purchase products you like at a moment’s notice. Nevertheless, the advantage of having credit cards can be very well its disadvantage. If you do not practice a high level of discipline when the time comes for you to pay, then you might find yourself in a financial rut. Because of this, you should know the dangerous pitfalls, disguised as advantages, when you are using your credit cards. It is also beneficial to learn the kind of discipline you should have to avoid falling into a financial abyss.
Be Mindful Of Your Spending Prowess
Exercise caution when using your credit cards. Do not spend beyond what you can afford to pay. Most credit card holders say that they sometimes just find themselves swiping their cards without giving a thought whether they are spending within their means. Remember, having credit cards can give an illusion that you have lots of money than you actually have at the end of the month. If you overspend on your credit card, you are actually borrowing money from your future income because you are spending money that you do not yet have. To help avoid this, try to be aware about your spending habits by asking whether you really need such item or you are just buying it to gratify yourself momentarily. This can help you manage the temptation you feel whenever you encounter a product that you find attractive.
Try To Purchase A Product On Installment
Big items are usually offered on installment. If you will be purchasing one, try to find those that allow you to pay on installment, particularly those that are offered without interest. Opting for those that are sold on installment can help you own items that you have difficulty purchasing if it requires full payment. In fact, even if you have money to pay for such in cash, choosing to pay for it on installment can help your cash flow and allows you to have funds for other needs.
Avail of Cashbacks and Rewards
If you are using a credit card on a regular basis, you should know that this will allow you to earn rewards. There are cards that offer cash back while there are also cards that give points. For the first type, you can get cash as reward after reaching a certain threshold, which you can then use when you pay your credit card due. The second one gives you points as a reward after a spending threshold. You can use these points to redeem products that are on the credit card company catalogue.
Finally, keep track of your credit card spending by availing of online credit monitoring services. You can set an alert threshold which, after being reached will warn you that you are almost near your credit barrier. Doing so would avoid overusing your credit card which comes with a hefty penalty. Closely monitoring your credit card usage would also help you maintain a good credit score, which you can use for some other loans in the future.
It cannot be denied that having a credit card offers a lot of convenience, particularly in times when you have no available cash in your pocket. At the same time, you are also contributing to y our credit history when you use your credit card. You just need to be very careful and would have to keep track of your usage carefully. Do not succumb to temptation, else you will find yourself buying things you do not want. Be a wise spender and user of credit card and you will certainly reap the benefits.