How To Put Your Credit Card Use In Control

It is an undisputable fact that credit cards are easy to use

. They are convenient to carry around, they come in handy during emergencies, and they're a quicker way to make payments. However, every holder must learn the value of control. Knowing how to use it wisely is the only way to stay out of trouble. Consider the following tips:

Swipe only when needed. Owning a credit card isn't a reason to be careless about your spending. Just because you can charge it to your card and pay at a later time does not mean you should use it all the time. Shopping with a credit card usually leads to "impulse buying" and overspending. This is why it is recommended not to charge items that you can pay in cash. Use it only for planned purchases. This way, you can determine in advance whether you can pay for those charges on time.

Frequently check your account. Checking on your account enables you to examine your spending habits. How many times have you used your card for this month? What purchases did you charge to your card? Were those purchases important? In addition, checking your account alerts you for possible fraud or unauthorized transactions. In case of unauthorized charges, you can contact your issuer immediately and dispute errors right away.

Use no more than 50% of your credit limit. Another way to put your credit card use in control is to reduce your credit limit by at least 50%. This means, you would only use 30% -40% of your available limit, and leave the other 60%-70% unused. Aside from keeping your spending in control, such a habit would also keep your credit history in excellent standing.

Pay off your charges on time. Make it a habit to submit your payments on or before your due date. This allows you to save on the additional interest rate and late penalty charges. Consistent timely payment is also one way to raise your credit score.

Don't use your card just to earn rewards. Do you own a reward credit card? If yes, be careful about charging purchases to your card just the purpose of collecting reward points. Before charging anything to your card, think ten times. Ask yourself, do you really need to make this purchase? Can you pay off this purchase in full before your due date? Remember, carrying over your balances would mean paying more than your original debt. And because reward cards have higher interest than non-reward cards, your costs could be offsetting the value of rewards you get from your card.

One or two credit cards should be enough. Avoid applying for too many. Having many would not raise your credit score. It's how you keep up with your payments that matters the most. Therefore, limit the cards you have in your wallet and reduce the risk of debt.

by: Liz Roberts

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