No matter how old you are, debt is always a scary thing. As you get older, credit card debt becomes a very real fear. Many purchases we make in our adulthood are made with credit cards, and they remain a very efficient financial option. However, if you do not use the right practices with you credit card or are carless with them, then you can find yourself buried in debt. So if you think you need to take a step back with your credit card spending and find some more effective ways of using it, there are a few habits that can help ensure you use your cards responsibly and wisely.
Choose the card that fits your spending.
One of the most confusing aspects of using credit cards is which one you should choose. You’ve likely been approved and offered just about every card under the sun, but you want to be sure to choose the one that works best for you. Review your spending habits and see where most of your money is going, or where you are making regular big purchases. This will help you determine which cards match best with your spending habits. You can get cashback for your spending, receive travel points, or any number of valuable rewards if you choose your card wisely.
Know your rewards and use them.
Once you choose the right rewards card, understand what you get from it. A lot of people see these types of cards as more hassle than they are worth, therefore they often fail to reap the benefits that come with them. Get to know the rewards package that comes with the cards and take full advantage of them. Shop in places that offer the most rewards, use your credit card rather than your debit card for expenses that will get you a lot of points. Also, keep track of your points and be sure to use them, because what is the sense of having a rewards card if you don’t use the rewards?
Check your statement regularly.
Too many of us take our bank statements for granted. We regard them as junk mail when they are tossed in with the rest of our mail and we don’t even look at them online when we make our balance payments. If this sounds like your general practices then you need to start paying closer attention to your statements. These are very helpful tools in ensuring you have not been made the victim of any credit card theft, and it helps you keep track of your spending. Check your statements on a regular basis for anything irregular or to get a better sense of where your money is going.
Pay on time.
Keeping track of your statements is not just good practice for keeping an eye on your spending, but it’s also a good way to ensure you are paying your balance regularly and on time. Using your credit card for all your purchases is so easy that you can sometimes forget you actually have to put some real money towards it. Neglecting or forgetting to pay your balance on time is not a good idea and can lead to some pretty devastating penalties. You might think that letting it go a little longer, until your next pay cheque comes in is alright, but you don’t want to find yourself suddenly with bad credit. Set reminders for yourself to make the regular payments and make a habit of diligently sticking to a payment schedule.
Pay your full balance.
It is not just a matter of making payments on time, but also paying the entire balance on time. This is another way people think they are saving money with their credit cards. They make smaller payments and let the rest of the balance carry over into the next month in order to give them a little breathing room. However, the balance will still be there next month (along with a whole new balance) and all you’ve done is accrued interest and lost rewards points. Know how much you can afford to spend each month and don’t go over that amount just because you have a credit card. That way you’ll have a monthly balance you can manage.