A credit card has turned out to be an indispensable part of our lives, with its user-friendliness and suitable pay-back options. The offers, discounts, and deals that a credit card provides are unmatched by any other financial products and spell a prize for the wise user. But, credit cards can become debt traps if not used properly, or if you spend more than you can repay when the bill comes around. San Diego Based Billy Crafton, a renowned financial advisor talks about ways to use the credit card wisely:
- When you use your credit card regularly and pay bill on time, your credit profile with the bank betters. This can result in a range of benefits, such as an increase in spending limit and huge offers on loans and other financial products. In addition, such actions will enhance your credit score, which is tremendously advantageous if your score is low.
- Each Credit Card has its billing cycle. Once you are aware of the bill generation date of your Credit Card, you can increase your interest-free period. For example, if you make a purchase just after your bill is generated, you can enjoy up to forty-five interest-free days, and at times more.
- Read your credit card brochure carefully, particularly details about the advantages it offers and the reward program. Earning reward points can accrue several benefits in the long run, from free flight tickets to movie vouchers to huge discounts on electronics.
- Whether you are shopping at a local store or online, make sure that the retailer or merchant is an establishment you trust. This will reduce risk of your card being misused.
- Your bank may provide you suitable ways to pay back your credit card bills, for instance, EMIs. When you select this option, you can pay for huge purchases in monthly installments, such as a mini-loan. This will help relieve your financial strain. You can also make your payments through the credit card net banking.
- Be careful about the use of credit card. Avoid maxing out on your credit limit each month. Monitor your credit card transactions on a regular basis to see particular patterns in your spending. Keeping track of your expenditure will also make sure that unforeseen transactions come to your notice and you can point them out to your bank right away. You can even set your limits on credit card to avoid any over spending.
This is why Billy Crafton says that the best way to use a credit card is by using it only when you require it, and by charging only what you know you can afford to pay back comfortably. If it is used this way, credit cards can offer a suitable way to pay for everyday expenses and might help you build credit, pay off debt, earn rewards, or finance a purchase you can pay off over time. But if you are not cautious, a credit card can also bring about high interest charges, enhancing debt and a ding to your credit health.
Billy Crafton San Diego Financial Advisor 