Your credit is just like your health. If you do not manage it wisely, you will have to deal with some serious issues later. Most of us prefer to use credit cards so that we do not need to carry cash, which is a security risk, as well as it being expensive to withdraw cash from the ATM. However, many people often end up in credit card debt because they were unable to manage their credit properly.
Credit card debt can easily become a debt trap and it can be very hard for you to get out of this trap once you are stuck. It is therefore important to be conscious of the risks and know how to use your credit wisely to avoid the pitfalls. Here are some of credit card tips to help you stay out of debt.
1. Create and stick to your budget. For tips on setting up a budget read Learnaot’s article ‘Your first step towards financial freedom’
2. Borrow only what you can afford to pay
3. Always pay your bills on-time
4. Pay more than the monthly minimum
5. Check your credit report regularly
6. Use rewards points
7. Look for the best deals available
8. Consider the hidden fee
Another important rule to keep in mind, when you apply for a new credit card make sure that you lower it’s limit rather than having a high limit. Ensure that the limit of your credit card is always quite a bit lower than your monthly income. In this way, you will then be able to manage your credit properly.
To learn the essential skills to help you achieve financial freedom, click here to register for Money Essentials.