Here’s to give you information about Best 5 Financial Tips for your credit cards, the best way to use them and the best way to get the most benefits out of them. Credit cards, yeah the bane of everyone’s existence, a fantastic product in the right hands and not so great in the wrong hands.
I’ve got some important tips like how to choose and use it:
1. Credit card type
If you can go for a low-interest type facility, okay so obviously you won’t get the bells and whistles, the membership points which are so often promoted. Realistically, particularly if you’re going to have a bit of debt on the card go for low interest, it’s going to cost you a lot less in the long term.
2. Pay it off each month
I know it’s tempting to make the minimum monthly balance and just cover it. What happens when you’re not covering the full portion? Interest capitalizes and the debt just slowly blows out. And talking about high rates, I mean it’s up to 20% on a credit card, that interest capitalization catches up very quickly, but if you pay off every month, fantastic, doesn’t cost you anything, convenient product, absolutely awesome to use.
3. Your credit card limits
If you’ve got a large credit card limit, $20-$25,000 is quite common particularly if you don’t use it, if you’re only using a small portion of that, just be aware that if you go for new borrowings. Car loan, home loan, the bank will always assume that limit is fully drawn and that will affect your borrowing capacity on other facilities so try not to have a limit that you don’t need and be aware that when you go for new borrowings just reduce it back – it will give you a stronger borrowing capacity going forward.
4. Security
Don’t put your number out there any more than you need to, particularly for any borrowings that you can’t just take your card back these days, it’s tap and go and all those sorts of things. Going overseas, make sure you contact your lender, let them know you’re going, that you’ll be using your card, where you are so that when you get there if you’re going to go to Bali if you haven’t let them know they generally won’t honor the transaction straight away could cause you some problems. So keep them aware and they’ll protect your card and they’ll protect you.
5. Convenience
So use the card online, buy your stuff, everyone has the use of that facility, used in the right hands they are just very, very useful tools. The danger with them, of course, is that we incur debt that we don’t pay off immediately, it spirals out of control and you end up with a lot of small unsecured credit debt that takes a little while to pay off. So look, an alternative to that is simply a debit card.
So a Visa/MasterCard debit card has all the same benefits, you can use it as a credit card but instead of incurring debt it simply takes that transaction directly out of your nominated savings or cheque transaction account and it’s just coming from money you already have so you don’t incur debt but you get all the convenience of the same benefits.
So finally credit card, really useful used correctly, great product, just be mindful because if it’s not it can come back and bite you, and you like These Best 5 Financial Tips for your Credit Card
Tags: Card, Credit, Debit, Interest, Benefits, Credit card, Low interest
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