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How to use credit cards wisely?

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Credit cards have become an integral part of our lifestyle. Right from the time a person reaches the legal age to obtain credit cards; they want to have one in their wallet. While these plastic cards do give you a feeling of financial independence and happiness, this can be short lived if you do not use them wisely. You might end up regretting your choice to sign up for these cards and might have to spend years repaying your dues if you use credit cards recklessly. If you are unsure about when to use these cards and when to avoid them, here are a few points that can come in handy.

First of all, it is important to understand that having a credit card does not entitle you to shop without any thought or reason. Avoid using these cards to shop for groceries, clothes and items that are not essential for your existence. Many people use these cards to pay off their utility bills. While this indeed simplifies the process of paying the bills, you have to make sure you repay the money spent so you have enough to pay your bills the following month without accumulating excessive amount of dues on your card.

It is important not to use the credit card to purchase items that are not an immediate necessity. If there are things that you need for your home such as furnishing items, new crockery or more, it is recommended that you wait until you have enough money to purchase them instead of using your card to purchase them just because they look good or the offer seems irresistible. Do not use credit cards for purchasing expensive gifts for your family or loved ones. In case you do, ensure you make your monthly payments on time so they do not turn into insurmountable dues.

If you do not want to end with a blemish on your credit report, it is recommended that you do not spend over 30 percent of the total credit limit offered on your card. The minute you exceed 30 percent of the limit, the transactions are reported to the credit bureaus. Not making your repayments on time and defaulting on your payments can result in hampering your financial record and therefore, your credit scores which can be tough to repair. In order to prevent all these problems, it is recommended that you use the credit cards wisely.

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