Today, everyone uses a credit card to purchase or pay bills. The use of cash has reduced a lot and we slowly are getting dependent on plastic money. Now, owning a credit card is not considered as a luxury but as a necessity! This is because we face a cash crunch situation every now and then.
But with our over dependency, one should know how to use a credit card or you might get charged different kinds of penalties from Banks. Keeping this in mind, we will be showing you 4 important ways to utilize your credit card in a responsible way.
- Never Ever Withdraw Cash:
Please keep this as your mantra. Withdrawing cash from a credit card might solve your problem/emergency only in the short term. We must tell you that Banks will charge hefty interest rates on credit card cash withdrawal. The interest rate will keep mounting up until you don’t payback that withdrawn money on time. This interest rate can scale upwards of 40%+ per annum. Hence, never ever withdraw cash!
- Control Yourself & Don’t Go On A Purchasing Spree:
One more thing that a credit card does is allow us to buy more than we can afford. Banks give us a credit limit and we tend to take undue advantage of it. You must remember that you have to pay back the money for whatever you purchased. You will have to pay back that amount with a high interest rate. So control yourself and purchase only what’s required within your budget.
- Don’t take undue advantage of Card Benefits:
Best Credit cards have various benefits such as cash backs and discounts. You can always use these benefits on your credit card through purchases where this discount is applicable. You can earn reward points and make use of them too. But make sure to not take undue advantage of them as in order to use the benefits you will have to keep purchasing and like the pointer above mentions, try controlling yourself.
- Always pay your Bills ahead of time:
Lastly, remember to pay your credit card bill either earlier than the due date or on the due dates but not later than that. Doing this will help you in planning your future finances in a more effective manner.
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