Clever Tips manage credit card smartly

Credit cards are in a huge demand these days, owing to the benefit of ‘shop now, pay later’. But gradually people are realizing that the plastic card may land them in a debt trap. Well, that’s not true; credit card debt happens only when you are not able to manage your finances well and don’t remain disciplined about the payment.

However, if you use credit cards in a careful way, it is a handy way to manage cash flow. But before that, you need to read about the benefits of a credit card, how to use it smartly, and also about the charges, or interest rate associated with it.

Benefits of a Credit Card

With a credit card, you can manage regular expenses and keep track of it. Another benefit is that a credit card helps you to make bulk purchases even if you need funds instantly.  Third, the credit card is the best instrument to meet the emergency situation, especially when you are short of funds. By managing a credit card wisely, you can build a good credit history which will further help you take loans when you need it.

How to use it wisely?

  1. Don’t give the PIN number to anyone else. If someone else takes it and use it, the bank won’t pay you back the amount. Another point to consider is to change the PIN regularly. Pick something that is easy to remember, but it is better not to use the birthdates or other passwords that are easy to guess.
  2. Read your bill- Don’t submit the bill amount impulsively, open it and check it thoroughly. Query the bank about the purchases that you find suspicious. Keep the credit card receipts so that there is no chance of error. You can ask your bank to send the credit card online It will help you to keep track of payments and make you feel organized.
  3. Pay full for each month– Most of the times people fall in credit card trap when they procrastinate giving the bills. Hence, it is advised to pay off your bills along with the interest rate within the grace period. Debts can spiral and may go out of control. Because the interest builds up when you don’t pay credit card amount every month. The interest charges and the way the amount is calculated vary from company to company. So, it is better to pay the credit card online
  4. Don’t make late payments– If you don’t make payments on time, it may lead to serious consequences. You will be charged late payment fees plus the interest amount, if you are repeat offender your credit card provider may increase your interest rate, and paying late amount can hamper your reputation too.
  5. Minimal amount trap- Last but not the least, avoid the minimal amount trap. In such a clause the credit card company ask you to pay a minimal amount, which later then spirals up to be a big corpus, thus piling up your debt. In the end, you may even end up paying more.

Parting Thoughts

A credit card is a powerful financial instrument that can make or mar your income. So, use it wisely and make credit cards work in your favour.