Knowing how to use your credit card wisely is key so that it does not become a double-edged sword. Plastics are useful payment instruments, as they avoid the risks of carrying cash and also allow you to pay for your purchases in installments.
According to the Financial Superintendence of Colombia, in February of this year , a total of 16,050,114 cards were active . Considering that the population is around 50 million people… How many active cards will each Colombian have?
In this post we give you some tips so that you learn how to use your credit card and take advantage of it in a responsible way.
1- Avoiding debt is the key to how to use your credit card
The first tip for you to know how to use a credit card correctly is how to buy. You should always do it with the fewest possible installments . Many people usually choose to pay in more than 6 installments, but before deciding the term in which you are going to pay, keep in mind that the interest is high , much higher than that of a free investment loan, for example.
When sellers tell you that the fees “do not feel.” Lie! Run away from there as soon as possible. Do not buy anything at 12, 24 or 36 installments if the product or service is not really necessary and even less if you do not have the money to pay.
Take advantage of the fees to buy products that you really need and that are worth the investment, yes, with planning, you will be using the credit card without getting into debt.
2- Pay on time
Whether you carry out the previous advice or decide to pay in large installments, one of the keys to correctly use a credit card is to meet the respective payment dates ; otherwise, they charge you interest on arrears, which is also high.
The second lesson to learn how to use a credit card without debt is to try to choose a single installment, never pay only part of the bill and make the full payment .
A good thermometer to know if you can buy or not is to have the money for payments in sight. If you do not have it or it is not enough, then immediately stop your purchase intentions with the card. If an invoice arrived that you cannot pay, this is a sign that you need to put aside your plastic and review your budget with a magnifying glass .
3- Do not finance expenses
Another good technique when you are learning how to use a credit card is to buy goods, such as appliances. It is not smart to use the card for expenses such as meals in restaurants , because in this case your wealth decreases as your debts increase without increasing your assets. Think, for example, that if no one applies for free investment loans to pay unproductive expenses, they should not do so through plastic.
However, one type of credit card user is frequent shoppers. Those people who use the card to make most of their purchases from the most expensive such as the home market, to the most everyday such as a coffee.
This is a good option for someone who has his household budget up to date, a great command over his money and already understood that the credit card limit is not money beyond the salary. If you have that self-control, you probably already know how to use your credit card and you benefit from its frequent use, since you accumulate points to redeem. Oh no? Don’t have a card that earns miles? Better go through Compare and choose one that allows you to have more benefits.
But if you don’t have such control, don’t worry, you are not unique. There are a multitude of people just like you. In this case, the best strategy to use the credit card without getting into debt is to avoid compromising your budget and that is only possible through planned purchases.
4- Take advantage of the cut-off date
A good tip to know how to use your credit card is to learn to manage your purchases with the cut-off date. If this is the 30th, for example, try to make your important purchases on the 31st or the first of the following month, as this will give you a longer period and it will not be reflected immediately in the next installment. Take advantage of those days of grace period between the closing of the card and the payment.
5- Do not fill yourself with cards
Even if they offer them, we do not recommend having more than two . Remember that even if you don’t use them, in many cases you will have to pay a handling fee . It is preferable to request an increase in the quota in which you have.
It’s hard to resist a product you’ve been wanting for a long time, especially when you find it on sale. A trip, a television, a Play, those shoes or that bag, that you like so much. If it is impossible for you to see it and not buy it, the solution is simple: do not go out with your credit card in your wallet. Buying without planning is enemy No. 1 to get into debt .
6- Reviewing the statement is a good use of your card
Another tip to know how to use your credit card correctly is that you begin to save all the payment receipts and keep track of what you spend . This way you will avoid surprises when you receive the account statement.
Learning how to use a credit card is a good strategy, because if you don’t know how much it really costs you, instead of helping you, it will become a stone in your shoe.
Always be on the lookout for extracts, as undue charges may appear, which may be operator errors or even the product of a cloning of your card , so be careful. And when you have any questions, contact your bank immediately.
7- Avoid making cash advances
Cash advances are one of the benefits of a card, but only in an emergency . Doing it frequently is costly and dangerous for your pocket. In addition to charging you a commission, the interest is generally higher and deferred for a term greater than 12 months, usually 18 months.
Now that you know how to use your credit card , the important thing is to handle it wisely and taking into account that what you consume you will have to pay for it, even with interest. Make smart decisions Get informed and compare!