SECRETS TO USING CREDIT CARDS WISELY

SECRETS TO USING CREDIT CARDS WISELY
SECRETS TO USING CREDIT CARDS WISELY

We’ve all had a credit card at some point or wanted to start using one. And it’s natural because credit cards are financing instruments that offer us benefits such as flexibility in payments and immediate access to cash.

In the world of credit card users, there are, to a greater extent, two types of people: some who have this financial asset but live in debt, and others, who do not purchase their card for fear of belonging to the first group.

Regardless of which category you belong to, in this article, we seek to make you part of the minority. A small but enviable group of people who, almost inexplicably, make use of their credit cards, indulge themselves, take advantage of their benefits, and despite this, live up to date on their payments. Incredible!

But hey, we first present a definition.

What is a Credit card?

Very easy, it is a credit tool; it is an agreement between a financial institution (bank or another type of company) and the borrower (the person holding the credit, that is, you), through which a quota of money is made available so you can use it through a credit card, whose subsequent monthly payment is subject to the expenses you make and the number of installments to which the purchase is deferred.

Having a credit card involves various expenses, and knowing them will help you use it in a more responsible way.

We mention a few expenses since they vary depending on the entity:

⦁ Management fee

⦁ Bank commissions

⦁ Insurance

Next, we will tell you some secrets so that you, too, can acquire, use, take advantage of, and pay your credit card without living “hung” monetarily speaking. Of course, keep in mind that in all the tips, a seed of prudence is planted so that the fruits are abundant and visible in your financial health.

1. Take advantage of discounts:

Credit cards have a network of businesses determined by the bank with which they operate. The advantages that these networks offer are discounts and promotions on different goods and services. Some examples of these businesses are; restaurants, travel, and fashion, among others. Find out what benefits your card offers you and take advantage of them when offered.

2. Use card points:

The cards usually have allies whereby making your purchases; you will accumulate points, which will later be used to make your purchases and even pay for trips and other luxuries that you do not want to miss. Our advice is to investigate, according to your card and the bank to which it is affiliated, how you can accumulate these points, and, once you are aware of this, pay for all the purchases you require from these sites with your credit card.

3. Think before you pay:

So far, all the advice was about how to buy?... but now we will go a little further back in the process, and we will see something important in your purchase decision.

When buying with a credit card, it is vital that the debt to be paid does not grow disproportionately with unnecessary purchases. A useful method when it comes to knowing if your purchase is a reasonable decision or not is to compare what you are buying with the time it will take you to pay for it; in other words, compare the useful life of your purchase with the time it will take you to pay for it. Debt that can leave you, for example:

If you are in the process of becoming independent and you need a piece of furniture, it is known that it can accompany you for a long time, so if you really need to make this purchase, you can afford to pay in several installments. But if you are going to buy clothes, change things; It is known that clothing has a short useful life, among other reasons, because fashion passes quickly, so, in this case, it is best that you buy it in a cash payment.

4. Include “credit card” in the expenses of your budget:

At this point, perhaps you already saw it coming, but in case you did not, we will clarify it for you.

It is necessary to have space in your budget for everything that you are going to pay through your credit card so that you do not get into the habit of borrowing from the bank to always satisfy cravings. We recommend at this point to put a number of expenses that will allow you to make for each period of your budget, do not forget the interest to pay for each purchase.

It is vital that you understand that your card is NOT an extension of your salary but a loan that you are requesting from the bank to pay it back at a certain interest rate.

5. Pay in one installment:

In tip 3, we gave certain examples that come to be in opposition to this advice, but whenever possible, try to pay everything in one installment, so you will live with fewer worries about your debts and you will save money from the interest that they charge you for each quota that you extend.

Remember…

Your card is not an extension of your salary; rather, it is a tool to make purchases when you do not have cash at that moment. But this money is not yours; it is from the bank, so you will have to pay it back and with its corresponding extra, so be careful not to exceed these transactions.

We hope that these tips will be very useful for your financial life and that they will be easy for you to carry out. Soon we will come up with more articles for you, so do not lose sight of us.

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