You’ve probably received your fair share of advice on obtaining and using credit cards. At the end of the day, your credit cards are your own personal property. You can use them as you see fit. However, it helps to keep a few tips in mind about when and how to use credit cards. These trusty pieces of plastic have tremendous power, and it’s in your best interest to know how to put them to good use. In the past, these credit management tips have served credit card users well.
Use Cash for Essential Purchases
When you make a monthly budget, it helps to separate your expenses into “discretionary” and “non-discretionary” categories. Non-discretionary purchases are essential outlays over which you have limited control. These might include utility payments, school supplies, food, rent and the like. Since it can be tempting to rack up charges on your credit cards and thereby accumulate more credit card debt, you should avoid using credit cards for non-discretionary purchases unless you don’t have a choice.
Keep Track of Automatic Bill Pay
Paying your rent, utilities and other recurring expenses via automatic bill pay is an easy way to lower your stress level and reduce the likelihood that you’ll forget to make an important payment. However, borrowers who fail to keep close track of their automatic payments may accidentally exceed their cards’ credit limits. This can lead to unintended and unpleasant consequences.
Keep a Card for Emergencies
Many borrowers keep a separate credit card for major emergencies like a visit to the ER or a big repair bill. In fact, some conservative borrowers only use credit cards in such emergencies. Limiting your credit card use to high-stakes situations like these can reduce your monthly bills.
Control Your Balances
If you notice that your credit card debt is beginning to pile up, dial back your discretionary purchases and use more of your income to pay off your past-due balances. While this is easier said than done, it’ll pay dividends in the long run.
Responsible Credit Card Use for Life
Using these credit management tips is a great way to bolster your personal finances and turn the page on your credit card debt. If you need some extra advice about managing your finances or wish to get credit card relief from a trusted team of professionals, contact a credit counseling company that offers a full suite of services. The right team will negotiate directly with your creditors to consolidate your debts, waive fees and even reduce your interest rates. It will also offer valuable resources and guidance to help you manage your money for the long term.