As the name defines, it the thing which is used to purchase various products, services and it can give you liquid cash up to certain limits. Credit card plays a great roll in emergency financial crises. That means you can spend money which is not yours and return it with interest, service charges, maintenance fees, annual fees, etc. It is like a loan of certain amount i.e. card limit. Whatever the part of credit limit amount you used; pay the charges only for that amount. To avoid to be getting cheated there are certain precautions for the use of credit card which are ignored by normal swappers.
ATM money withdrawal
Suppose you are on the picnic with your friends and certainly in an emergency you need cash. At this situation any one will go for his credit card. But if your bank account balance is less than the amount you need, don’t swap money from credit card. Even if you can do it, you’ll going to abide heavy interest rate on cash advances. These rates are almost double of your normal rates of interest. If you withdraw $250, you may have to return near about $500 towards the credit card company. Use it only in extreme emergency.
Checks of the credit card
User always receives checks of its current account. Card companies send mail under subject of ‘checks to use’ at your given address. If you can not control your mind to use it, they will charge each check and the charges deducted from your account. It is genuine suggestion to you that do not use this facility. Like cash advances, these charges also taken from your regular expenditure limits with priority. These charges are varying from company to company and card to card.
Monthly bill payments
Do not use your credit card for your regular bill payments such as mobile phone, electricity, fuel, society tax, etc. If you do this you will make it as a habit and you may not remember to put it in your monthly budget. And hence your budget may get fail. This will escort you to reckless spending and miss guides to pay the bills within the time. Still you want to use it, make full payment of the bills at once in a month and always make its track record to avoid building of the habit of credit card.
Need or want
This is genuine law proven in the practice and that is ‘need or want’. Whenever you purchasing any thing, think a second before, is it your need or want? Surprised! You will get the correct answer from your brain and don’t listen to your mind. Mind always fails in the calculations. If you can not come up with the money for the thing you are purchasing then don’t purchase it with your credit card. It is not false money. You have to payback it with charges applied in the monthly bill. It is the best way that you plan your expenditure limit for each month and try to stick to it.
These are the basic tips regarding the better use of credit card. Before every swapping of the card you must have a glance on the tips. Remember credit card is only the loan process, it must use in the emergency situations. All the best and be a smart credit card holder!
