How to Use a Credit Card Properly and Wisely

Credit cards are proof of today's modern financial sophistication, who doesn't know the convenience of using a credit card? Just swipe the card and the transaction is successful.

Not only the convenience of transactions, credit cards also usually offer lots of discounts and cashback for each use.

There are so many plus points offered by credit cards to their users, but did you know that if you are not wise in using a credit card, it can become a financial boomerang?

Most people think of credit cards as a place to owe, because it's easy for people to be overwhelmed when they have to pay bills.

 

The reason credit cards are very popular with the public

● Installment 0%. This is one of the things most favored by prospective credit card owners. 0% installments will make it easier than buying goods on credit directly.

● Can Condition Recurring Payments. If you have electricity, telephone and other bills, the bank will pay all your bills in advance by reducing the credit card limit. That way you don't have to bother paying the bills one by one.

● Discounts and rewards. The more often the credit card is used, the more points or rewards you get. These points can be exchanged for direct prizes provided by the bank where you make a credit card.

● Can pay credit card installments with a minimum payment. Did you know that credit cards provide payment relief every month? You are allowed to pay the minimum value of the monthly bill amount.

Getting a credit card for the first time is a very happy thing. Usually you will have a thousand plans with a new credit card.

Errors in using a credit card are usually made by many novice credit card holders. So, here's how to use a credit card wisely for beginners so you don't get stuck in credit card debt.

Tips for Using a Credit Card for Beginners

In essence, a credit card is a means of payment that makes it easier for you if used wisely. Credit cards can be a tool for managing monthly finances, moreover there are lots of discounts and cashback you can get if you choose to pay by credit card.

Here's how to use a credit card wisely for beginners.

Choose a Credit Card that Fits Your Needs

There are many credit cards offered by banking financial institutions with various attractive offers. Choose a credit card that suits your needs, for example if you want to use a credit card as a means of payment then choose a credit card that offers lots of shopping discounts and cashback.

Don't Use Many Credit Cards

It's okay to have more than one credit card. But what you need to know, the more you have a credit card, the greater the costs that must be incurred. 

Each credit card usually has an annual administration fee, late fees, bill printing fees and others.

If not used wisely, having lots of credit cards will actually make you shop more and more without thinking.

Credit card bills will swell every month, this will become a burden especially if you have more than one credit card.

Close or Deactivate Credit Cards that are Rarely Used

Don't get caught up with all the conveniences of a credit card. If you already have more than one credit card, immediately close the one that is not needed. But before that, make sure all bills have been paid, OK?

Adjust Credit Card Limit With Income

In general, credit cards will provide a limit of two to three times your salary. For example, a salary of 4000 dollars, the bank will offer a limit of 80.000 dollars. 

Even so, that doesn't mean you have to take this limit. Always use a credit card within reasonable limits and make sure the bill is no bigger than your monthly salary.

Use a Credit Card For Transactions You Can Pay

As explained earlier, credit cards are not places of debt. A credit card is a means of payment that facilitates transactions. So, don't buy things that you can't afford in cash.

We recommend using a credit card to pay for important things. This method is very effective for avoiding credit card debt that is too large.

Check Before Transaction

You might be tempted by a credit card promo for 0% installments or a 70% discount with a credit card.

Don't be tempted just yet, even though you get a discounted price and low interest, the credit card limit will still be reduced according to the value of the item.

Don't Make Cash Withdrawals With Credit Cards

Credit cards have cash withdrawal facilities. This facility makes it possible to withdraw cash through ATMs such as express loans.

Behind the convenience of withdrawing cash with a credit card, there is a large interest of around 2.5% each month. If bills are not paid on time, interest will continue to grow.

Don't Pay the Minimum Bill

Again, credit cards make payment easier. You are usually allowed to pay a minimum bill of the total bill, for example the minimum bill is 10% of the total bill.

This means you can pay 10% of the entire bill in one month. However, this method is very detrimental for you because the interest will continue over time.

Check Your Monthly Bill Carefully

Once a credit card bill is received via email or letter, make sure you check it first. Check all transactions in a month, don't let there be transactions that you didn't make but are listed on the bill.

After making sure there are no 'phantom' charges in your credit card transactions, note the important dates listed. This important date is usually the invoice due date.

Do not lend credit cards to anyone

Don't let the credit card fall into other people's hands. Even though he is the person closest to you, it is possible that the credit card you have is misused.

This will have fatal consequences if the credit card is used without responsibility. Monthly bills can swell beyond the plan.

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