Happy New Year to all! Forgive me for not constantly updating my blog since I have been occupied with a lot of tasks at work lately. I had a coffee last night with friends after watching a movie. I was surprised upon knowing about their average monthly credit card bills.
It’s easy to get credit. In fact, the leniency of banks and financial companies to give credit caused the recession in 2008. Unfortunately, just as how easy to get a credit, it’s even easier to misuse it. With a credit card, it’s all too easy to live above your means. Want something? Just whip out your card. Before you know it, you’ll find yourself buried in debt and unable to get any more credit. However, credit does not necessarily lead to debt and despair if you use it responsibly.
As much as it is to live a debt-free life, there may come a time when you need to establish credit. One simple way of doing this is to save a certain amount of money in your savings account and then apply for a loan equal to that amount. You’ll be able to establish credit without putting yourself into debt. Just make sure you pay back the loan on time.
Once you establish yourself as a good credit risk, you’ll probably receive credit card offers from different credit card companies. Now comes the hard part- using that credit in a proper and responsible manner. Don’t be enticed with “pre-approved” credit card applications you get. There are some advantages of having a credit card but you need to watch out once you have it by following some of the tips below:
Control Spending. It does not mean that since you now have a credit card which you can use for cashless purchases, you can now spend lavishly. Never use a credit card to buy anything that is not in your budget for the month. Proceed with caution when raising your credit limit. It might seem like your credit card company is doing you a favor, but it really wants you to spend and charge more. A good way to control spending is the Waste-Watcher’s Diet provided by Robert Kiyosaki.
Display Discipline in Payment. Pay off your balance in full every month to avoid finance charge. If you discipline yourself, you get the benefit of a short-term, interest-free loan. However, if you don’t pay in full every month, always pay on time. This will help you avoid hefty late fees and interest rate hikes. If you can afford, always pay more than the minimum if you can afford it.
Reach Your Goal. Most credit cards feature rebates and rewards. Maybe you’ll earn free airline tickets or get cash back. If you’re planning to get a credit card, you may want to consider one of these, but you still want to be careful. Don’t make unnecessary purchases just to earn rebates. Otherwise, you’re putting yourself in debt for a freebie.
Shop Around For Better Deal. Even if you’re satisfied with your current credit card, keep your eyes open for better deals. You might save a significant amount of money by switching to a different credit card with better terms and lower interest rates.
However, when shopping for a better deal, some credit card companies may lure you to a new credit card with low “teaser” rates. Inquire a lot about this as sometimes, these rates often skyrocket when the introductory rate expires. Also, watch out for over-limit, cash advance, balance transfer, and transaction fees.
Make sure that you understand what you’re getting into when you sign up for a credit card and change cards if you’re not being treated fairly. Unfortunately, if you’re having trouble paying your credit card debts, then these steps for debt settlement provided by Robert Kiyosaki might help in settling your dues.