Credit cards play a pivotal role, especially when carrying out a variety of transactions. You can use them to make purchases. Your credit card also helps you to monitor your account balance and other transactions you conduct. Different banks have various credit card models for their client groups. You should do your research to identify a card with the most benefits offered by your bank.
This article is tailored towards people with an existing credit card, however, if you are getting a credit card for the first time you may come across something called an interest free credit card, just remember, nothing in life is free, so read the fine print carefully. If you already have a credit card and want to get the most out of it, here are several recommendations for you that will help you to have a good handle on it.
Don’t Use it as an Extension of Your Salary
This is a rule of thumb that you should follow if you consider applying for a card or if you already have one. Having a credit card does not mean having more money, but it gives you the possibility of financing your purchases and then paying it in instalments and with interest, which may vary depending on the entity in which you request it. It is money you owe the bank. They are purchases that you will have to pay and with interest.
Don’t Collect Credit Cards
Having three or four credit cards does not put you in an advantageous situation, but on the contrary, you run the risk of over-indebtedness by having to pay for the products you bought with all your cards. You will end up with a bad customer record for the bank, and that is not good if you need to acquire a loan or other credit in the future.
Do Not Finance Your Purchases With Many Installments
One benefit of using a credit card for purchases is that you can later pay it off in parts. However, financing them in high instalments is not a good option, since you will end up paying more for the product due to the interest that the bank has, so you could end up in debt.
How Much Can I Order on a Card?
Banks normally assign a quota on cards, but you can decide which quota is best for you. To determine the best space, think about the strategy for using it. For example, if it will only be to obtain benefits, you can defer everything to a quota and request for something that is less than or equal to your monthly income. In this way, you will never spend more than you can afford.
Beware of Fraud and Scams
In recent years, more and more people buy a credit card to finance their purchases. However, this has also meant that fraud and scams are the order of the day. Knowing how these situations occur will allow you to react quickly and not be a victim of these bad practices. You should constantly review your card statement. If you find something that does not box, go to your bank.
If you happen to be a victim of credit card fraud, contact your bank to inform them of the situation and so that, if necessary, your card can be cancelled. Most financial institutions offer the possibility of purchasing insurance that can protect you when these types of situations occur. Ideally, you should evaluate the possibility according to your income. You should also report the issue to the relevant authorities in your area.