Getting your first credit card can be exhilarating as it indicates you have finally arrived. With no requirement to pay cash immediately, the tendency to swipe your card to buy almost anything can be very tempting. But if you are not careful, it can also wipe the smile off your face.
There are a certain things which we should keep in mind before taking our credit cards for granted.
Stick to a Budget: – The convenience of using a credit card can easily make you spend more than you can afford. So, when you start out, keep a monthly limit on expenses. Don’t go overboard with your spending.
Pay the Entire Amount Due to Time: – At regular intervals, you will receive a bill containing details about how much you have spent by card and the date by which you have to pay it up in cash. Also, don’t fall for the trap of paying only the ‘minimum amount’ and rolling over the balance to the next month as this will eventually lead up to a debt trap. Banks usually charge a high interest rate for rolling over balances.
Secure Your Card: – Do not disclose details about your card to other people as the information can be misused and you will be held responsible for that. For instance, if you give your card to a salesperson, make sure the card information is not stored anywhere. Also when making an online payment, ensure that the payment is being made on a trusted website.
Avoid Cash Advances: – Do not use your credit card to withdraw cash from a bank or ATM because the money you withdraw is considered a cash advance, and you will have to pay a very high interest rate. So do that in the case of emergency only.
These points might sound obvious to a lot of people but when it comes to applying practically, we tend to forget what the pros and cons of using a credit card can be. It is therefore important that you constantly keep a check on your expenses from your credit card in order to maintain your monthly budget.
