Wise Use Of Credit Cards: 5 Smart Tips

Having a credit card or two in your wallet can be beneficial or be the reason why you are in debt. However, credit cards can be absolutely wonderful if you use them wisely and that’s why we’ve compiled a list of the top 5 smart tips for wise credit card use. Check out these tips to become a credit card pro, which could even help you improve your credit score!

  1. Don’t Buy What You Can’t Afford

Credit cards are so easy to use, a simple swipe could literally get you anything you wanted but with that ease of use there’s the risk of creating too much debt. That means don’t swipe for things you cannot afford because you’ll find yourself in hot water. Look at it this way, if you can’t afford something with the money that’s in your checking account, you cannot afford something by swiping a credit card. Live within your means when you have credit cards because you’re less likely to get into a bad financial situation.

  1. Immediately Pay

When using your credit card, be smart and savvy about it. Majority of cards have interest rates that will be applied to the balance during the next billing cycle. This means that $100.00 purchase could get an extra $27.00 slapped on to it if your credit card has an interest rate of 27%. To avoid paying interest on your purchases, immediately schedule a payment right after use because you have sometime before the billing cycle generates to forego the interest charges, it’s usually a grace period of 25 days or fewer.

  1. Take Advantage of Rewards

Many credit card companies like to entice consumers with attractive rewards like cash back, points and travel miles. With that said, you should take advantage of a credit card that has a rewards program that will fit your needs. For instance, if you find a credit card that offers 1% cash back on all your purchases, you could end up making money by following the tips above. Anytime you swipe that rewards credit card for a purchase, immediately set up a payment and make that the habit. Overtime, you’ll start to see your rewards balance sky rocket and all that happens for just paying for your purchases – how easy is that?

  1. Fraud Protection

Most credit cards offer the peace-of-mind of fraud protection, which means any unauthorized purchases are not your responsibility. For instance, if your credit card is stolen and you immediately report it, most times than not, you are not responsible for any charges during the theft period. When you use cash, checks, money orders, cashier’s checks and even debit cards, you aren’t as protected and you’ll be liable for any charges or damages during periods of theft.

  1. Staying Below 30%

Smart and savvy credit card users typically keep their balance at 30% or below of their total limit. This allows them to easily manage their balance and helps with their credit scores. For example, if you have a $1000 limit on your credit card, it’s wise to keep the balance at $300 or less because a low balance results in good remarks on your credit score.

Are you ready to take these tips and become a wise credit card user?

3 Tips to Manage Debt

money-256312_1280Did you know 8 out of 10 Americans have debt? According to a recent study published by Pew Trusts, the most common type of debt stems from mortgages but that’s not the only thing people can struggle to pay back. There are credit cards, student loans, car loans and so many other things that can all add up to a decent size. With that said, how well do you manage your debt? Read on to learn three simple ways to make managing debt easier to get on the path of eliminating debt completely.

  1. Know How Much You Owe

Time for a reality check! Make a list of all your debts and write down how much you owe and to who you owe it to. From there, make sure you note the monthly payment amount and each due date. Once you’ve gotten everything in front of you, you can clearly see how much you need to pay. Seeing everything in plain sight will give you the motivation to buckle down and get smarter with your money. Transfer your list to a calendar and place it on your refrigerator to serve as a constant reminder of when everything is due. On top of that, add reminders into your phone so you reduce the chance of missing a payment.

  1. Cut Back On Spending

In order to live debt-free, you’ll need to cut back on daily spending because you will want to put as much money as you can towards your debt. Think about the things you need and not the things you want. For instance, if you order take-out once a week, consider cutting that back to once a month. If you buy a cup of coffee each morning before work, consider making it yourself. These little conveniences will add up to a great amount of money that can be applied to debt you owe.

  1. Consider Consolidation

Like mentioned earlier, you may have many different forms of debts and juggling all of the payment due dates can be stressful. Instead, you could benefit from a debt consolidation loan that could lower your interest rate on many accounts by lumping them together into one single loan. For instance, you could apply for a debt consolidation loan from Broadstar Financial Group that would take your existing debt and put them into one easy-to-manage loan.

When it comes to eliminating debt, you need to be proactive with the way you manage your money. By trying the suggestions above, you could be on the path to financial freedom!