What comes to your mind when you see a credit card? Credit cards offer us a kind of stability and a sense of freedom as there is no need to carry physical cash with us at all times. It also offers a great medium to build a strong credit history but it depends entirely on the user, and how he or she uses their limit. Misusing the limits and options of a credit card leads to drastic results which may culminate in a bad credit history that will take years to dig out from under. Every credit card holder should be committed to making payments on time and if the user refrains from this, it creates a black mark in the credit history of the person concerned.
Acquiring a credit card marks a big step in the financial career of every person. It would be wise to learn how to use the credit card as a tool through which you can create a good credit history for yourself. On the other hand, it also seems to be the easiest way to get into great debt. However, each of us must handle our credit cards in the best way possible and the below facts will actually update us on how to use a credit card efficiently.
1) Credit card is plastic but the money in use is real
Most of the people using a credit card do not feel the real pinch of the green notes as real money is not moving through your hands when you use the card. This is a chance for great deception as although real money may not pass through your hands, yet the credit card resembles money. In fact, just because you do not feel or smell the green notes while you use the credit card, don’t be under the assumption that you should treat it any different to real cash.
Using a credit card entitles you to pay the credit card company at a specific date of the month and not paying on time will certainly lead to grave consequences. Late payments will certainly affect your credit score in the negative direction and similar consequence shall also be expected when you do not pay the minimum balance. Always remember that low credit scores and unfavorable credit reports will actually make other lenders charge higher interest rates for loans and credits.
2) You are certainly paying for shopping around
Make sure that you look around when you are searching for a good credit card which suits your requirements and needs and do not jump onto the first offer which you receive from a credit card company. This will aid you in receiving extra perks and will involve fewer hassles while you pay your bills.
3) Make your own credit card limit
It will be wise if you set your own credit card limit which will help you to stick to it and will also help you in managing your payments as then you can have a clear picture of how you will manage your payments every month.
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