A credit card is a convenient way to pay for your purchases, be it online or at physical stores who accept credit card as payment.
Are credit cards bad?
A simple answer to this question is that it may be good or bad, depending on how you use it. If you have the discipline to just stay within your allowable budget, credit card is a good friend for you. Likewise, it will be an enemy, and will hurt you financially if you don’t use it responsibly. So take note, don’t use it if you can’t pay your expenses when the due date come.
Benefits of having a credit card:
- Convenient to use. You don’t need to carry along a huge amount of cash all the time. You’re not holding too many coins or bills in your hand. It’s also a good way to avoid transmission of microorganisms.
- You can track your expenses.
- It can help you just in case there is an emergency that you need to pay for something, and you don’t have available cash to pay for it immediately. Furthermore, it can serve as a back-up plan.
- You enjoy the privilege of buy now, pay later. But take note, you really need to pay to avoid charges.
- You can redeem cash backs and rewards.
- You can use it when you go abroad, some banks charge minimal to a no extra fees.
- It is not linked to your checking account, or any savings account, so no need to worry.
Important notes about credit card:
- You should only get a credit card if you can use it rightfully.
- Keep a copy of your signed slip, every time you used it, to track how much money you’ve already charged off. Keep also the copy of your receipt, to have a proof that you already made the payment for the previous billing cycle.
- Always pay the full amount of your credit card statement every month, this is to avoid interests, or any accumulated charges.
- In a simple sense, use your credit card just like a simple debit card, the only thing is that you have to pay for it before the due date. Unlike the debit card that you have to deposit money for you to use as payment.
- Check if your credit card charges an annual fee. There are banks who offer zero annual fee for life. But there are banks who charge an annual fee. Don’t worry about the annual fees because banks usually waived it, just make sure that you are in a good standing. Meaning, you paid every month, and you used the card for a certain accumulated purchases. So, the bank will determine it.
- Don’t use your credit card to buy for your wants. Use it to buy for your needs. Like grocery items and other household essentials.
How can a credit card saves you money?
- A credit card can save you money from the cash backs, rewards, and points you earned from using it. You can also earn free travel and accommodation, depending on the credit card company promo. You can exchange your rewards for goods, services, or you can redeem it to help pay with your balance. Take note that credit card companies, or issuing banks, are different. So, you have to check and compare first the privileges that you can get before choosing one.
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