Pick a Card: How to Manage Your Credit Card and Debt
Having a credit card is part of adult life. Most adults have one, and many young people get one for the first time at college. Possessing a credit card can make it feel like you can spend as freely as you like. You can worry about paying for things properly later. But in reality, you need to be much more careful with your card. Whatever you spend on it becomes a debt that you have to manage. Some people become too reckless with their cards and spend money they can’t afford to pay back. If you’re not sure how to manage credit cards, start with this short guide.
Choosing the Right Cards
If you don’t currently have any credit cards, you might be unsure about how to choose the best one. There are a few important things to take into account, including the interest rate. When you’re looking at cards, you’ll have to compare the APR (annual percentage rate) to find the best deal. You also need to know the minimum repayment you have to make and any charges you might face if you don’t pay on time. Of course, there are bonuses too. You might find a good introductory deal, or you may get loyalty points or gifts for using your card. Some credit cards build up flying miles or store points, for example.
How Many Should You Have?
Another question you might have is whether you should have more than one credit card. Many people have two or more. Having multiple credit cards can be good for your credit score. However, there is a point where you may have too many cards. Trying to manage five credit cards is going to be difficult for anyone. It can be a good idea to have separate cards for different purposes. You might have different priorities for your cards if you want to pay for a vacation or consolidate prior debt. However, many people find that just one card is much easier to manage.
Knowing When to Use Your Card
Anyone who has a credit card should be careful about when to use it. As a rule, it’s not a good idea to use it to cover daily expenses. If you’re struggling to buy food or pay bills, getting into debt isn’t going to help you. However, if you want to build your credit score, you might choose to put daily expenses on your card. Only do this if you’re sure you can pay off your debt. Credit cards are useful when you know you will be able to make payments towards it, but you don’t want to spend time saving for your purchase.
Managing Credit Card Debt
Spending money on your credit card gets you into debt. If you’re careful, this shouldn’t cause you any problems. However, if you have trouble making payments, it can be worrying. One option might be to consolidate your credit card debts. Research personal loan companies to find a loan that will turn several debts into one. This will make it easier to manage if you have rung up debts on several cards. Budgeting properly will help you make sure you can pay off any money you owe.
Credit cards can be extremely useful, but they don’t give you free cash. Be responsible when you use yours.