A credit card can be an ally when it comes to making last-minute purchases, in the event of a medical emergency, to pay for expensive products such as household appliances or even to pay off overdue bills. There are many options for using a credit card, but you need to take some precautions to keep your financial health in balance.
Credit cards have the highest interest rates in the financial market. Average credit card interest rates reached over 300% per year at the end of 2023.
There has been a greater tendency in recent years for people to take on financial responsibilities with credit cards. According to the Consumer Debt and Default Survey, 86.8% of consumers have paid bills using credit cards.
However, moderation is needed when using this form of payment. Here’s how to use your credit card conscientiously.
1. Use your credit card sparingly
The first step towards a healthy financial life is to know how much you can spend each month on your credit card. This also includes purchases in installments.
The credit card is not an extension of your income. In other words, it’s not because you have a $300 limit on a card that you have that extra amount to spend each month. You’ll still have to pay it back with interest.
So don’t use your credit card uncontrollably, as if it were an extra amount of your monthly income.
2. Pay attention to the expiration date
You need to choose an expiration date for your credit card that is close to the day you get paid. In other words, if you receive your salary on the 10th, you can choose a card payment date on the 15th. That way, you’ll have the time and income to pay off your bill in full.
3. Buy on the best date
All credit cards have two important days: the day the bill is due and the day the bill is paid. On the day the bill closes, purchases will no longer be posted for payment that month. Therefore, the best day for purchases is the day after the invoice closing date, as the full amount will only be paid next month.
However, be sure to organize yourself to pay the full amount the following month.
4. Check your credit card spending
You always need to keep an eye on your credit card statement to keep track of everything, right down to the final amount to be paid. Also, don’t forget about streaming services and other services contracted over the internet that can be automatically credited to your card. If you no longer use them, just cancel them.
5. Don’t stop paying your bills
If you’re the type of person who forgets all the bills you have to pay in a month, you can make a financial schedule of all your bills.You also have the option of putting your card bills on automatic debit. This will have them paid automatically on the due date.
6. Don’t have too many cards
Having more than one or two credit cards with high limits is unnecessary. It’s essential to concentrate all your purchases on one card, even those made in installments. This will make it easier to pay off the cards and avoid unnecessary spending.
7. Pay in installments as little as possible
Making conscious purchases of products is very difficult for those who have credit cards, so buying products that can be paid for in cash makes it easier to close the accounts for the month. On anniversaries, for example, couples visit physical stores or buy erotic products such as a penile cap online to spice up their relationship. These are products that are worth buying every month to keep the relationship going. That’s why installments aren’t convenient.
However, avoid making too many installment payments. Paying only the minimum on a bill means paying only 15% of the total amount. In this sense, the amount can double in less than 6 months. Therefore, only pay in installments for emergencies, high-value purchases or even if you can’t pay everything in one month. Installments can be a villain because of the interest.
