- Personal Finance
When You Should Avoid Using Credit Cards And How To Use Credit Cards Wisely
You may use your credit card without even thinking whether you should use it at all. The fact is that you must refrain from using your credit cards under certain circumstances. Let us have a look.
- You must never use your card if you are not certain of your ability to clear the bills. Once you make your purchases using the card, you become liable for clearing the dues. But, if you do not foresee any source of funds in the near future, it is wrong to use the card. Likewise, you must not use the card if you are not aware of the availability of credit on the card.
- If you are planning to avail bigger loans like a home loan, a vehicle loan, etc. in the near future, you must stop using your credit card a few months earlier to that. This will reduce your liability. You must not forget the fact that the home loan or car loan lenders will have a look at your other liabilities including credit card liabilities while considering your loan applications.
- Just because your friends and colleagues use their credit cards, you should not use them also. The financial circumstances of every individual are different and you cannot compare your financial status with that of others.
- If you are already having other debts, you should refrain from adding your burden by using credit cards. Instead, you should plan to reduce your existing debts.
- You must never go for shopping when you are emotionally upset. You will not make the right decisions. You may over-use your card in a fit of anger or when you are in a frustrated mood. Similarly, when you are under the influence of alcohol, you should never use your credit cards.
Tips for Judicious Use of Cards
- If you want to use a credit card just for the sake of rewards on it, you must limit your purchases only to those items you may need. So, when you visit a grocery store or any other store, you must have a list of items you need. You should not deviate from the list under any circumstances.
- Once you receive the credit card bills, you must ensure to pay the entire bill amount before the due date. Sometimes, your payment may not reach the credit card issuing bank on time. So, you must plan your payments in such a manner that the amounts reach the bank or the credit card company well before the due date. Any delay or default in payments may attract exorbitant interests and late-payment charges.