To use a credit card and not rack up huge bills, unnecessary interest or land yourself in debt, you need to know how to use it responsibly. Those who get a creditcard for the very first time, such as students fresh out of college, can easily find themselves slipping into bad spending habits. Even a spending spree lasting just a couple of weeks can turn into unmanageable debt before you know it. If you spend more than you earn and can’t pay your bill in full each month, interest starts being added to your balance. This makes your debt grow until there is no way you can afford to pay it all back.
So, what kind of credit card spender are you? If you are disciplined, you will use your credit card wisely on large purchases so that you can spread out the payments over a few months. You will only buy things using your credit card that your monthly income can cover, and you will always pay your bill in full each month. Disciplined, responsible credit card users will never miss a payment, knowing that this can damage their credit score and make it really difficult to apply for credit cards and get accepted in the future.
Another sign of a savvy credit card user is someone who carries out a full credit card comparison before getting a card, in order to find one that offers some kind of reward for spending. There are many of these cards out there, offering everything from loyalty points and frequent flyer miles to cashback. All of these rewards can help responsible borrowers get more for their money.
If you are a reckless spender, you are likely to use your credit card whenever it’s the most convenient to do so. This means that instead of going to an ATM or using your bank card to pay for everyday purchases, you simply whip out the plastic. An irresponsible credit card user is also likely to spend more than they earn each month, meaning that they won’t be able to afford to pay their credit card bill when it comes in the mail. You may also only pay the minimum monthly repayment on your credit card bill, causing the remaining balance to be carried over to the next month with interest added. If you carry on with this reckless credit card spending, you are likely to end up in debt.
Toni Patton
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