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Though credit cards play an important role in each of our lives, helping us financially in most aspects, most of us do not know how to use them right which is the reason for people to get neck deep in debt. You can put your card to use effectively and establish a good credit rating through the usage of your card if you keep a few simple things in mind. Let us take a look at a few situations when you should refrain from using your card.
First of all, remember that credit cards are not for everyday use. Learn to use cash to purchase your daily requirements. Do not use it at gas stations, clothing stores and restaurants. It is important to remember that this plastic object is not a substitute for cash. Reach out to your debit card for your everyday needs and reach out of your credit cards only for specific purposes like online purchases for which you cannot pay by cash.
Most of the people use their cards liberally; however, when it comes to repaying their dues, they pay only the minimum amount. If you consistently resort to doing this, you will only take ages to clear off even a small debt. Hence, refrain from paying just the minimum dues and increase your payments whenever possible so you can clear off your credit card debt soon.
Don't buy things that are beyond your reach just because you have a credit card handy. This is one of the main reasons for people to get into huge debts. Leading a lavish lifestyle when you cannot afford it just because you have these plastic objects on hand can prove to very disastrous. Learn to live without your income and use credit cards only in case of emergencies or for objects you cannot do without.
Finally, don't assume that closing your card when you have reached the available limit is the best way out. In fact, this can impact your credit score adversely. Never close cards that have heavy dues on them. You can either opt for balance transfer on another card or pay off the entire amount due by cash before you close the card. Remember, a wrong decision on your part can leave you without any card for a long time.
Effective credit card management is a must if you want to establish a healthy financial lifestyle. It may take some compromises from your end, but, it will surely be worth it!