Considered a “villain” by many, credit card has benefits and can be very useful, just use it in a conscious way. But how to use the credit card in your favor? First, as its name already says, it is a “credit”, that is, it is not your money. And that’s where the problem lies: the false sense that “having a credit card” is “having money”. None of this!
Using a credit card is like borrowing money from someone (in this case, from the bank or financial) and having to return on a certain date. The difference is that there is no “friend” behind this loan, meaning if you do not pay, the debt grows in no time. This is because the credit card has the highest interest rates on the market. So do not just have it, you have to know how to use it!
When to use the credit card?
Since credit card is not “money” then when to use it? The credit card can be used strategically, for example, to concentrate all expenses in one place.
For this, it is essential to have a financial planning, that is, know how much you can spend and make sure you have money to pay. But this option is only for those who have a fixed income, that is, that does not suffer variations.
Now, if you do not know how much money you will have at the end or the beginning of the month to pay off your credit card bill, get away from that alternative. Prefer to use the money you have on hand to make purchases. After all, buying in sight (in debt) is always the best choice!
By acting as a “loan” of money, the credit card can also be earmarked for emergencies. But beware: even to use it at an extremely necessary time you need to make sure you have money to pay the invoice in the near future, ie on the due date.
Otherwise, what could work as a help can become a headache later. For this to happen, you can predetermine a value to use on your credit card that does not compromise your financial health.
In this case, if you need a higher value, the ideal is to look for a personal loan, which has interest lower than the credit card. Do the math and get away from the credit card snowball!
Credit card: buy at sight or installment?
Whenever possible, choose the option “cash credit”. In addition to being clear how much you have spent and how much you will need to pay, it is a way to not compromise your credit card limit.
Of course, “splitting” on the credit card is not wrong. Installment on credit card is a flexibility that you have to pay for your purchases. However, in order not to lose your credit card expenses, you should not only see the installments, but the purchases as a whole.
Do not stay in the automatic: accompany in the own invoice the portion that is being paid and the amount of plots remaining. There is no mistake!
How to Use Credit Card: Infallible Tips
1) Impulse shopping on credit card provides momentary pleasures, does not it? Watch out! Before you buy, ask yourself: Will not I regret it?
2) Credit card withdrawals are not cheap! When the invoice arrives, you may have a surprise. If you need money, opt for a personal loan.
3) Plan spending with your credit card and never use it as a supplemental income. Remember: it’s credit (that needs to be paid), not money!
4) Pay your credit card bill before it even expires, if possible. Aside from not paying interest, it’s a way to release the limit faster.
5) Make a smart choice with extra income, such as 13th salary or vacation: you can withdraw your credit card once and for all.
Credit card: I do not have the money to pay, what now?
Do not have the money to pay your credit card bill? Escape from the minimum payment! Paying the minimum you are opting for the financing of your debt, ie it goes into the revolving credit. To better understand, you continue to “borrow money” from your credit card because you can not pay it off entirely.
If you got into this situation, it is because you did not know how to use the credit card in your favor. To pay the full amount of your credit card bill, you can opt for a personal loan, with installments that fit in your pocket.
It’s a smart debt exchange, because in addition to paying less interest, you get to know how much you need to pay per month. If you make a loan to pay the credit card, ideally not to use the card in that period, not to compromise your budget. Save it and wait for the quietest time to reuse it however you want.
Prioritize get out of the red and balance your bills. Then make a plan to not go out shopping with no money to pay the credit card bill later.