Credit cards are such life savers. They are used to leave emergencies, or buy products when we do not have the amount to cover in a single payment. DO you need some quick cash? Just head over to the nearest ATM. However, they can become the nightmare of those who do not plan their finances and those addicted to shopping.
A card is a financial instrument that works as a means of payment, and as a mechanism to obtain credit from banks. The issuers of the card grant the user, through a contract, a revolving line of credit. This means that you can re-use the credit as you pay. So, how do you not abuse this privilege?
Contemplate Your Costs
Before getting a credit card, it is very important that you keep in mind all the expenses that come with it.
- Annuity: These are charged annually for the privileges you enjoy by using credit card.
- Interest rates: These vary from one institution to the other. The average rate is around 35% per annum.
- Charges and commissions: The charges add up when you do not pay your debt on time. The commissions are additional charges that are charged when you use the ATM or reward programs, among others.
Schedule Your Payment Dates
The most basic rule in having a credit card is to spend no more than you earn. When you make expenses that your income can not cover, your finances are out of line and you end the month with negative numbers. You should be very careful with the dates of payments, and avoid using your card when they are close, or exceeding your budget.
With Higher Financial Power Comes A Higher Responsibility
Avoiding unnecessary and impulsive purchases is very important to avoid unnecessary debt. A small debt can grow and get out of control if you make purchases each month that cannot be paid and you are not paying attention to your payment dates.
There Are Simpler Ways To Get Credit
It is not always necessary to process a credit card or resort to a standard loan from the bank to obtain a loan. There are many online platforms that would easily lend you money for your important projects, provided you prove to them that you have the capacity to pay up.
Of course, your data and banking information would probably be requested too. When you are approved, you can just head over to an ATM near you to get the money, easy – take it from me.