What to Do and What Not to Do if you have a Credit Card

| April 8, 2013
Credit Card

Credit Card

Today, every person almost has his or her own credit card increasing the number of people who are drowning in their debts. If you have a credit card, more so of you have a bunch of them, it’s better to know the do’s and don’ts to have a healthy spending habit and avoid getting unwanted debts.

Do’s for using your Credit Card

The following are the best ways to make the most out of your card and ensure that you have a good credit standing:

1. Use your card wisely

Wise buyers are good creditors. Before swiping your card, think about the time you are going to purchase. Is it a need and you need to purchase it? If yes, you can go with your purchase, but if not, wait until you have enough money to buy it.  Using your credit card for unnecessary things can incur you more balance plus some merchants require you to pay a Credit Card Surcharge every time you make a purchase with your card.

2. Stay within 30% of your credit limit

Even if credit card companies give you a certain credit limit, it does not mean that you need to make purchases until the point of having the maximum credit limit of your credit card. This will just end you up not being able to pay your debts on time. Staying within 30% of your credit limit increases your ability to pay your credit and also gives you lesser interest rates.

Don’ts for your Credit Card

These are the basic things not to do with your credit card because doing them actually increases your credit until such time that you can’t actually pay for them:

1. Use your credit card for daily purchases

Your credit cards are not meant to be used in all your daily purchases. By its term “credit” card, you only use it when you really need it like if you don’t have cash in your wallet to purchase what you need. Daily expenses such as your gas, food, groceries and the like should not be paid using your credit card at all. Leave cash in your wallet most of the time or resort to using your debit cards if you are not comfortable with bringing cash.

2. Use your credit card to purchase luxuries you can’t afford

Another improper way to use your card is to purchase things that you can’t afford. Let’s say a new gadget comes out and you feel like upgrading your phone into a new one, but you just don’t have the money to buy it. Never ever swipe your card for this purpose hoping that you can pay your credit using installment payments because it will make you use your card more for similar situations leaving you a high amount of debt.

3. Pay your credit card balance on a minimal basis

Once you get your credit card balance, make sure to pay more than the minimum monthly payment to lessen the length of time you are required to pay your debt, which also means lesser interest and total credit.

Robert Davids is a financial counselor. He is a graduate of Finance in a prestigious university in London and is now based in the US. He also helps industries or business owners to have high risk merchant accounts through HighRiskPay.com.

What to Do and What Not to Do if you have a Credit Card

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