How to use credit cards to help your finances

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How to use credit cards to help your finances


Updated: October 10, 2018

The content is accurate at the time of publication and is subject to change.

Credit cards are like a double edged sword. They could work both ways depending on how you use them. They could be beneficial to you when you use them properly. They could also wreck your finances completely when you don’t use them properly. Here are some tips to use credit cards in the right manner.

Use them like cash

A lot of people treat their credit cards as a free gift. That is why they don’t think twice before swiping it for unnecessary expenses. You need to use the credit card judiciously just the way you use cash. For example, when you want to buy something, but don’t have the cash to afford it, you walk away. Similarly, with credit cards too, you need to spend only when you are doubly sure that you will be able to repay the debt on time. That way, you would always ensure that your bills aren’t way above what you could afford.

Keep the debt to a minimum

The ideal way to use the credit card is to avoid debt at all costs. The moment you end up with debt, where you haven’t paid the bills before due time, you are charged a late fees as penalty. You are also charged interest on that debt. If the debt is high and the interest rate too is high, as is the case with credit cards, it will end up increasing your debt further. So make sure you always repay the debt before the due date. The key is to spend only when you have money in your savings account or when you know you will get the salary at the end of the month to repay it easily.

Avoid unnecessary penalties

Late fee is one of the unnecessary penalties that you can avoid by repaying the debt on time. You should also avoid overdraft fee for crossing your credit limit, something that you shouldn’t be doing at any stage. Credit cards sometimes charge you cash advance fee for withdrawing cash from the ATM. There are other types of fee associated with credit cards as well, like the charges for submitting a check with insufficient funds in the bank. You need to avoid all these penalties.

Don’t shop for rewards

You will be able to pay your bills on time, if you don’t spend a lot. You can manage that by buying only what you need instead of being carried away by shopping rewards.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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