May 22, 2022 3:31 am

Credit Card 101

Everyone tries to keep from getting sick by doing certain common things; for example, there are many people who follow the saying, “an apple a day keeps the doctor away.” As silly as it sounds, perhaps there should be a similar clever saying that could help people stay out of credit card debt. Like a terrible sickness, credit card debt can cause devastating problems to any individual, along with their families. One of the major problems with debt is that many people do not know what they are getting themselves into until it is too late.

In my opinion, one of the first steps to being a responsible credit card holder is to come up with a strategy of some sort. This strategy may be different from person to person, but everyone should have one thing in common: a financial budget. People can come up with a financial budget by calculating monthly expenses versus monthly income, along with other factors. Again, these “other factors” can differ from person to person, but the most common one would probably some kind of emergency fund.

Calculating a financial budget should be done before you even apply for the credit card. Once you know what your monthly budget is, you can begin to search for the right credit card for you. When searching through the various credit card companies, it is important to pay great attention to every detail… Yes, this means read the fine print! Pay attention to the rewards programs that are offered along with the obvious information such as interest rates, etc.

Along with preparing a financial budget, it is a good idea to establish some deadlines for yourself or whoever the card holder may be. These deadlines can include putting a limit on the amount of time in which you allow yourself to pay off whatever amount is on your credit card. If you do not meet the deadline, it is a good idea to “punish” yourself in some type of way; although many people will laugh at this or perhaps not want to follow through with this, it can actually help in the long run. On the other hand, if you do meet the deadline, you can reward yourself. As I mentioned before, many credit card companies have different types of rewards programs for such situations.

Believe it or not, another tip regarding credit cards would be to not actually treat them like credit cards! Try to only use your credit card when you absolutely need to; otherwise, it is a good idea to make sure you are able to pay off the balance, in full, as soon as you are able. Cash is the best, and safest, option. People who let themselves get all wrapped up in the idea of having a credit card, the magical piece of plastic that it is, are most likely the ones who will end up in debt. It is best to act as if you credit card is sacred and limited, like cash.

It is a smart idea to keep the number of credit cards in your wallet as limited as you possibly can. Keeping track of one credit card is hard enough as it is, but can you imagine how some people manage to keep track of as many as five or six credit cards? I believe that those people are the ones that cannot keep track of their finances. There is no reason to have more than one or two credit cards; if you feel the need to use your credit card a lot, you should apply for one that is accepted everywhere rather than having credit cards to certain places build up in your wallet.


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