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If you are among the people who think that using credit cards wisely is an easy task, then you are in for a surprise! Using credit cards needs a lot of care and caution in order to ensure you don't fall prey to credit card debts out of which it will take ages to wriggle out. There are a few dos and don'ts that every person applying for or owning a credit card should be aware of.
First of all, before you decide to use the credit card for any purchase, make sure it is something you cannot live without. Using credit cards for accessories, furniture, products and services that can wait is a foolish decision. It will only lead to unnecessary debts.
In case you are undergoing a tough time in terms of finances, it is always better to call you credit card issuers well in advances and let them know that you will not be able to make the payment for that particular month. Some banks will waive off the late fees and other penalties if there are informed well in advance. You can also negotiate on better payment terms with the bank so you can continue making payments to clear off the debts without incurring any more.
Do not use your credit card to pay off your utility bills. It is one of the easiest ways to accumulate debts on your card that eventually spiral out of control. Remember, your credit card is not an alternative to cash, so use it only in cases of dire emergencies.
Don't skip your monthly payments on your credit cards. This is one of the worst things that one can ever do. Not only will you carry over the debt to the next month, but you will also increase the outstanding balance because banks tend to add a lot of fees and penalties for payments that are not made on time. If you cannot pay off the balance in full, at least ensure you make the minimum payment due on your card to stay in the good books of the banks, thereby safeguarding your credit history and score.
Do not ever opt for cash advance on your credit card. Cash advances usually have a higher rate of interest as compared to the purchases made using the card. They do not have any grace period associated with it too. Hence, stay away from withdrawing cash using your card until you are left with no choice.