How To Use The Credit Card Wisely

Posted by Nick Niesen on October 29th, 2010

A credit card is a piece of plastic card that can either help the user budget his finances or cause him a chain of troubles. This involves a credit system where the issuer lends the user a certain amount transpired in his account and the user pays his balance at the end of the month or billing period.

This balance is charged of no interest if paid off dutifully at the end of the month. Otherwise, the charge rate rises each month the user fails to meet his obligation.

A credit card is advantageous if properly used.

This provides the user the privilege to shop anytime he wishes even without cash on hand given that the balance is paid in full and on time. It is more convenient than carrying cash in your pocket, which is susceptible to being lost, or be in accidents. It will also help you in establishing a good name in terms of credit. The credit card system is a convenient way of purchasing and paying for services or goods both in the typical stores and online stores because of its easy access features. More important of all, it provides incentives that you can enjoy. These incentives come in reward points and are redeemable.

However, care must be taken in consideration in choosing and using the credit card. It must be noted that these incentives can also be a propaganda of the company to lure you to more debts, and subsequently cause you unbearable headache on how to get them paid.

The credit card user must know that this card can be more costly compared to other credit forms if the payment is delayed. If this establishes your credit name, it can also ruin your credibility due to late payments. And because you don't worry of the amount upon purchase, it can cause you to lose control in expenditures until your debts grow to a bigger and bigger balloon. Unfortunately, it may be too late for you to reach them. In addition to these, the complicated terms can as well complicate your life!

But amidst all these, a credit card can be a good asset to your business and personal lifestyle. Those stated above are just warnings to guide you to the wise use of your credit card.

So before deciding on the credit card that you plan to apply, make sure to weigh the importance of the benefits that the company offers. And when you have been issued of the card, be a responsible cardholder. Keep in mind that though you are not yet spending your cash, sooner at the end of the month, you will. So be intelligent in purchasing your items. Stick to your budget when you market your goods. The advantage of a credit card is that you can avail of the discounts right when they are offered, unlike when you have to pay cash, you wait until your compensation arrives.

And notably, make sure that you pay your accounts on time to avoid late payment charges.

A responsible and disciplined handling of the credit card is required in order to avoid failure of payment and misuse of your monetary fund. Remember that this should be an asset that you must maximize the use. Don't turn it to a liability that will dump you to a deep crisis.