Being a thrifty and practical person, I was never a fan of credit cards. It was only in 2010 when I finally said yes to credit cards. It was my friend Zeny who convinced me to get one. Well, it took her 2 years (or more) and a lot of explaining why credit cards can be an advantage to me.
I am one happy credit user becuase it works to my advantage!
Though credit card works best for me, it is not for everyone because in time it can be the source of debt troubles. I knew people who are still problematic as to how they can pay off their debts which incur so much interest. That’s why it’s important to understand the role of credit cards in your financial life before getting one.
Here are my Tips and Advice to Make Credit Cards Work for Your Advantage:
Ask yourself the following questions before signing that credit card application:
1. Am I financially capable of paying the full amount monthly? Using credit cards is actually fun because of the many perks, such as, rewards system, points toward merchandise, airline miles, or access to exclusive events, but if you cannot pay the entire amount once the bill arrives that's where the problem arise. Interest does not stop until you pay in full.
2. Will I be able to use this card responsibly? If you are an unwise spender, do not get a credit card. If you're a shopaholic, do not get a credit card. Remember that although you might use credit cards like cash, they are actually considered debt as long as you haven't paid in full amount. Eventually, credit cards will have an impact on your financial goals.
Here are my eight tips
1. Be an educated consumer. Take the time to consider credit cards in the context of your budget and other financial priorities.
2. Don't get a credit card just because they're giving something away.
3. Pay bills on time so you won't have to pay late fees or jeopardize your credit history.
4. Pay bills in full each month so you won't have to pay finance charges.
5. Use credit only when it's necessary. Don't use credit to buy just to impress others.
6. Keep track of all credit purchases so you know if there are bogus transactions reflected on your bill.
7. Keep tape receipts, original receipts and printed billings for future reference.
8. Use credit cards to your advantage. I have 5 credit cards but I often use the one that offers awesome freebies.