Credit Card: Friend or Enemy?

Are you planning to buy something? Among the payment choices that a person has, credit cards are considered to be one of the easiest ways to pay the bill. All that you need to do is to swipe the card and that’s it, but what about paying it off later? And if you don’t settle your credit card bills within the grace period, what about the accrued interest? There is a lot of management required if you have a lot of credit cards in your wallet. Credit cards can be your friend only when you know how to settle the bills within the deadline, but they can be your deadliest enemy if you don’t know how to monitor them. The more credit cards you have, the more pile of debt you’re going to tackle.

Credit cards are friendly, but any mismanagement with them can get you paying high interest rates. They are practically very helpful because you can use them anytime, anywhere, but their use is often unwise. If you set your financial plans and you know where and when a credit card can be the right choice for you, you’re going in the right direction. Setting up goals and plans can save you from making an unnecessary transaction. Not only do your financial plans support your future, but they can also save you from a stack of liabilities.

There are always merits and demerits of everything we choose to use. If there is a risk, there can be profits too. Likewise, if credit cards can put you in trouble, they sometimes can get you out of trouble too. They are helpful when any emergency knocks your door and can boost your purchases, which can be a con too. When your cash is readily available, you are willing to buy something unnecessary, which can increase your expenses, so you need to keep an eye out for that.

How to avoid credit card pitfalls?

There are few precautions that you need to bear in mind while using a credit card:

  1. Monitor your debts – You need to track your debts and keep a monthly check and balance on your credit card bills. It will help you stay away from high interests and taxes.
  2. Prepare a budget – You need to make a budget so that you can avoid additional expenses.
  3. Make an effort to stick to the plan – You need to stick to your financial plans and pay the bills within the grace period.
  4. Extra precautions – Always choose a reliable company to get a credit card. Moreover, keep an eye on your online purchases since they can deduct much more than you assume.
  5. Stolen cards – In case your credit card gets stolen, report the company as soon as possible.

Credit cards are easy to use but hard to manage. You can maximize your benefits by evaluating the pros and cons of using a credit card. If you avoid the cons, you are prepared to enjoy the advantages.

Posted by: admin on Category: Finance