Credit cards are very handy when we need to charge a large amount. Many of us say that it is only for emergencies, but it hardly ever stays that way. Next thing you see, you have maxed out your credit card and now have no back-up for your rent or other expenses. To prevent this from happening, we have a few tips on how to make your credit card work for you and not the other way around.
Pay your bills. Make sure that you pay your credit card bill in full every month. Try to only charge amounts that you will be able to pay in full the next month. When you cannot pay it up, it is the start of the downward spiral into credit card debt.
Use your account. Using your credit card leaves a trail. All your purchases are recorded on your account. Today most people have access to Internet banking which makes checking your account so much easier. Just log in, see what you purchased where, and where your balance is at. It is really easy to keep track of your money this way.
Big stuff and emergencies. Avoid making a lot of small charges on your card. Rather stick to charging big things like a new washing machine or microwave. It is very handy for emergencies when you need to pay for something and do not have cash. By emergency, we mean your friend was in an accident and does not have medical cover.
Use your rewards. Most credit cards come with rewards like frequent flyer miles or loyalty points. If you can meet the requirements for reaping these rewards and still pay off your balance in full every month, you have the right card.
To use your credit card effectively, you need to set limits for yourself about what you can spend and can pay in full. You need to be strict with yourself and stick to your own rules regarding the use of your credit card. It is easy to fall into a habit of charging everything and only paying it later. Try to avoid that trap.