The best ways to use a credit card

Tips to Best use of Credit cards A credit card can be a very helpful financial tool if it is used responsibly. Making a responsible use of credit card include making consistent, on-time payments which help in boosting your credit rating, and some cards offer rewards for purchases or even a 0% interest rate for a short period of time on any money transferred to that account. To use a credit card wisely, Follow these credit card tips to avoid common problems:

  1. Make use of the credit card as a budgeting tool. Try using your credit card as a budgeting tool if you’re confident that you can use a credit card responsibly and pay off the balance every month. By making all of your purchases with your credit card, you can keep a check on how much you’ve spent at the end of the month. Of course, you should only do this if you know you can pay off the balance each month. To make sure your credit card spending doesn’t get out of hand, never charge more to your card than you have in your bank account.

  2. Never miss a payment. Timeliness factor is a must if you are willing to use the card efficiently. Pay your bill every month, even if the minimum payment is all you can afford. Missing a payment could result in a late fee, a higher interest rate and a negative mark on your credit score.

  3. Clear your balance every month. Avoid paying interest on your credit card purchases by paying the full balance each month. Resist the temptation to spend more than you can pay for any given month, and you’ll enjoy the benefits of using a credit card without interest charges.

  4. Start using a rewards card. If you’re using a credit card for most or all of your purchases, it makes sense to use a card that offers rewards. Not only can you avoid paying interest, but you’ll also earn rewards such as cash, airline miles or retail points.

  5. Understand the difference between the needs and want: A credit card should be used carefully. Use the credit card for needs and not wants. Otherwise frivolous purchases can lead to debt. Credit cards can be used in emergency situations, such as a mobile phone bill that’s due before your next payday. Use the credit card as a temporary loan to yourself, and then pay back the amount as soon you can to avoid interest charges.

  6. Beware of the credit card fraud. While there is no foolproof way to prevent all instances of credit card fraud and theft, understanding and adopting a few best practices can help reduce your risk.

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