Regulating the usage of credit cards

| February 10, 2014

There are a wide variety of credit cards offered in the market and each and every credit card is different from one another. It is necessary to understand the terms of the credit card that one is going to obtain before signing the agreement with the credit card provider. Credit cards can be utilized for a wide variety of purposes ranging from swiping the card at a grocery store, a gas station or even for hospital bills at .

Credit cards can be utilized in places where they would be eligible for, but the factor to be considered most would be to have control on the credit used by the individual. Credit limit is a particular limit set by the credit card provider at the time of granting the credit card to the person. This credit limit would be set based on the person’s credit score and his or her ability to pay back the amount on time.

During the application process, the person applying for the loan would be asked for the amount of money they would be able to repay, and if the person is a good credit holder, then the credit card provider would be ready to offer the credit card with the credit limit preferred by the person. Setting credit limit is one, but to maintain the status is the major task for the person. Interest rate charged on the credit card and other fees associated with it should also be considered before choosing a credit card at .

Regulating the usage

Based on the credit limit set on the credit card, a proper budgeting plan should be framed. Budget plan should be in such a way that, following it should be an easy task. Credit card holders should make sure that they do not cross the 70% of the credit limit at any point of time because if they do cross the limit, then they would have difficulties in paying the respective credit card bills. Amount of monthly income would also play a crucial role in regulating the usage of credit card.

Higher the amount of income, better would be the status of the individual and so he or she would not be making use of their credit card to a greater extent and even if they do, they would be able to repay the bill amount on time. Expenses made by the individual should reflect based on the amount of money earned by them. Expense management would determine whether the person would be able to pay their credit card bills without any delay.

Credit card holder should plan beforehand on the expenses which they would like to handle using a credit card. This would give them an idea on how much credit they would use in a single month. Knowing this well ahead of their pay check would help them account for the amount of money which they would have to save for the credit card bill payment when the due date arrives. Failure to make a credit card bill payment would have the greatest impact of all on the credit rating of the person.

Category: Credit Card

About the Author ()

Comments are closed.