Credit cards are extremely useful and handy pieces of plastic, albeit only when used wisely. Unfortunately though, people end up obtaining credit cards without understanding the nuances of using them wisely and end up with insurmountable debts, way beyond their means of repayment. This not only throws finances off balance, but also has an adverse impact on the credit history of the person. Here are some key tips that can help you manage your credit cards wisely and keep your finances in check.
The underlying rule when you have credit cards is to clear off all your dues on time. It is recommended that you clear off the entire balance on the cards on a monthly basis. However, if that is not possible, pay off the minimum amount due on the card to prevent late fees and other financial charges. Not paying your dues on time regularly will lead to the credit card company increasing the fees and interest rates on your credit cards making it tougher for you to maintain it.
It is imperative to keep a check on your spending limit before you set off on a shopping spree. Most people end up exceeding the limit offered on the card, thereby attracting over-the-limit charges that are pretty high.
Limit the number of cards
Having more than six cards in your wallet can cause more harm than good. The higher the number of cards in your wallet, lower will be your credit score. The credit score dips further every time you apply for innumerable cards at the same time or close multiple cards simultaneously. Choose wisely and only have cards that have favorable terms.
Shopping using your credit cards just to avail the rewards on it is sheer foolishness. You will have to spend up to a certain limit before you are entitled to redeem the rewards and most often than not, the limits set are so high that you will find it tough to repay the outstanding amount.
If you have been using the credit card for a long time and have a good credit score, it is time to negotiate with the lender to get the interest rate lowered. Credit card issuers favor people with good credit score and hence will be willing to negotiate in order to retain you as their customer.