Credit Card Guidelines and How to Avoid Falling into Debt

Lots of people detest credit cards, however in actuality, if they’re utilized appropriately, they may be quite beneficial to you financially. Although I am one of those who feels that we can do without credit cards, there are some undeniable advantages with credit card use.   The truth is that by exercising self-discipline whenever using credit cards, it is possible to avoid slipping into credit card debt and rather take pleasure in your card as the financial as it was meant to be used.

Below are a few straightforward rules of thumb you can adhere to in order to ensure that you enjoy the FULL benefits and avoid the problem that many experience with credit cards.

1. Find a good credit card.

Not all credit cards are the same.  Many have hidden fees and charge exorbitant interest rates.  When choosing a credit card, check their website first and compare interest rates, including annual fees and ofcourse the places where you can use them.  There are simply alot of credit cards in the country and you can bet that they wanted you to have one for several reasons.

Be careful with annual fees.  In my experience there are actually some credit card companies who waives annual fees IF YOU ASK FOR IT. You got that right.  You need to ask for it.  If you have good credit standing, the CSRs can easily waive these in mere seconds.

Check out their rebate offers. Some credit card companies offers monthly cash back!  Some are tied in with gasoline companies and stores from which you can earn reward points.  At one point in my life, we earned more than P35,000 of rewards point from Citibank which my husband used to shop in Marks and Spencer.

2.  Study your Credit Card Statements every month.

Be sure to review your statements as soon as you get them.  Take the time to check out the charges and if you keep credit card receipts, this is the best time to do a quick checking, and if you do find some weird charges, call your credit card company so they can check the charges and so you can also dispute the charges quickly.

3. NEVER use your credit cards for ATM withdrawal.

If possible, you’d want to avoid using your credit card for ATM withdrawals or quick cash. Most credit cards charge higher interest rates and sometimes an additional fee when you withdraw cash from your credit card.

4.  Pay your Credit Card balances in FULL each month.

This is one of my mantras.  If you do not have the funds to pay your credit card bills in FULL each month, then YOU SHOULD not use them at all.  Credit card interests can easily snowball and before you know it, you are in neck deep in credit card debt.  NOT GOOD at all.

If this post in not enough, then read Ramit’s blog and he will say it again,

Don’t carry a balance (if you do, pay it off as quickly as you can). Pay the maximum every time. If you can’t pay off a purchase by the end of the month, don’t buy it.- I Will Teach You To Be Rich

However, if you are already in debt, then I suggest going to your bank and re-negotiate the rates.  These banks what their money back and will do almost anything in order to get them.  And on alot of cases, banks can actually lower their interest fees and even create a pay plan that you can follow.

5. Make use of those Rewards Points!

Alot of people actually fail to maximize those reward offers.  I am only familiar with Citibank and they offer an entire BOOKLET that summarizes ALL the establishments they are in partner with.  You can enjoy 10% discounts on restaurants and alot of stores.  They even have partner hotels, spas and resorts that offers up to 30%-50%  low season discounts.

BOTTOMLINE:

There are alot of advantages on having credit cards.  But the disadvantages can outweigh the benefits if you have no discipline and the money to keep on paying your bills at the end of each month.  So use credit cards just like you have the actual cash.  When used properly, you can receive and enjoy great rewards and discounts.  If credit card is not your cup of tea, then what the heck, there’s always Debit Cards!

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