Credit cards can be good to many. They can act as an extra buffer when the economy is in crisis and they can provide benefits in the form of bonuses and offers. However, it is important to use the credit card with caution. If it is used at regular intervals in everyday life, it is important to make sure that you can really pay back when the invoice arrives. If the costs go away, there is the risk that you will incur credit card debts that are both expensive and difficult to get rid of.
Here are some things to keep in mind if you use credit cards. Some of the points are perhaps quite obvious, but even the most obvious may need to be repeated at times.
Pay only if you can afford it
Many people use the credit card to buy things that are not really within the budget. You simply make the mistake of believing that the credit is part of the existing payment space.
One idea with credit cards is that they can smooth out the peaks and lows in the economy, but you always have to be able to afford to repay the credit. Using the credit card to buy things that you can’t really afford (over time) is risky and can lead to significant difficulties later on.
Analyze your credit card invoices
When the invoice arrives, you should carefully analyze the information. Today, however, many credit card companies use direct debit and / or e-invoice, which means that you do not automatically get a concrete paper to look at. If this is the case for you, print the invoice or autogiro specification.
When analyzing your credit card payments, you should use the critical glasses. Review the payments and, firstly, think about whether they are the ones you will use the credit card for (see above point). Also, look very carefully at what is the minimum amount to pay and what the total debt is. It can be tempting to pay only the minimum amount and thus push the problems forward, but then the credit also starts to cost.
Note in particular that some credit card companies that use direct debit automatically set the minimum amount as the amount to be deducted!
Avoid withdrawing cash with the card
If you make an ATM withdrawal with your credit card, you will pay a fee of anything between USD 20 – 50. This in itself is a reason to avoid using the credit card in the ATM. An even more important thing is that the withdrawal is a sign that you do not actually have cash to use. If you had cash, you would have taken out money with the usual bank card.
If you start using the credit card to withdraw cash, there is a risk that you will have financial problems. You also run the risk of continuously increasing your debts.
Limit the number of credit cards you use
Finally, let us mention something about the number of credit cards. The safest way to end up in a situation where credit card debt is growing high is to use many credit cards. With multiple credit cards in your wallet, you have a higher maximum credit limit and this can lead to unnecessary use, no matter how good self-control you feel you have.