Even though it can be easy to get into debt using credit cards, if you have a modicum of self-discipline, they can be beneficial. Having a credit card allows you to rent a vehicle when needed, makes it easier to book flights and hotel rooms, and is useful in cases of emergencies. Here are six tips for using credit cards responsibly.
Make Payments on Time
If you use your credit card for incidental purchases, you can keep balances under control by making payments on time. If possible, pay the balance off each month, but if not, at least keep payments up-to-date to avoid late fees. If you have open accounts which are not being used, consider closing them to avoid any non-usage fees of which you may be unaware.
Carefully Read Statements
When you get the monthly credit card statement, you should read it over carefully. Look for credit card purchases you did not make, check to make sure you were charged the correct amounts, and report any discrepancies you find. It would be helpful to keep your credit card receipts to compare to the monthly statement, but since you may forget, try to at least keep track of where you used your cards.
Take Advantage of Offers
If you have an account with a credit card company that offers rewards for using their card, take advantage of it by only using that card to make purchases. Make sure to enrol in their rewards programme so you can earn credit for purchases. If you are a business traveller, air mileage can add up to provide you and your family with a free flight to any destination of your choosing.
Compare Credit Cards
If you get new offers in the mail, don’t automatically throw them away, but read and compare them to cards you currently have open. Consider switching current balances to credit cards offering lower interest rates or generous cash back rewards to save money. You can get yourself Malaysia credit cards which offer several benefits, including the ability to borrow cash when needed.
Keep Balances Low
To high maintain a good credit score, you should try to keep you card balances low, preferably within 30% of the credit limit. Since the amount of debt you carry affects your credit score, by keeping balances low, you can keep the amount of debt you have low. Small balances are easier for most people to manage each month.
Don’t Apply for Unnecessary Credit
Even though a credit card may seem like a great offer, applying for credit too often can affect your credit score. Avoid applying for store credit cards because you cannot use them anywhere but at the store and the interest rates are usually much higher than bank credit cards. Unless there is a tremendous benefit to opening a new account, politely decline any credit card offers.
Credit cards work the same no matter where in the world you are, though some banks may offer more services with their cards than others, so compare benefits when applying for credit.