• Ndidi Ihim

The 5 Things You Must Follow When Using Your Credit Card

Credit repair might sound like a mundane task especially since it entails eradicating negative credit report information and making sure that you are keeping up with your bills. Although it may increase your credit score, this does not guarantee your creditworthiness. If you are aiming to get a higher credit score, you have to rebuild your credits. This will show your credit responsibility.

Credit card is useful but, admit it, not everyone is meant to use it. Even so, it is important to have ample knowledge as it is a good start to a healthy spending habit. It is a challenging task at the start but once you achieve the momentum you need, a good credit score is waving at you. Listed below are the things you should follow if you want to develop good credit habits:

1. Use Cash for Everyday Purchases

Buying simple everyday items can develop into a habit wherein you may tend to substitute a credit card with cash. It is always advisable to use your cash or debit card so that you can learn the habit of using cash as much as possible. Furthermore, you are less likely to make impulse purchases when you pay with cash.

2. Stop the habit of making minimum-only payments.

The less you pay now, the more you pay later. You might think that just because you have extra purchasing power now you can go and buy whatever you want. The truth is, you will eventually suffer from that especially if you are the type of person who always goes overhead with their budget and buying things they do not even need. Additionally, you will gain a massive amount of interest that you will still pay in the end. Your happiness will be short-lived especially if you will realize that you cannot pay after all.

3. Identify your NEEDS and WANTS.

This one is not only applicable in terms of credit cards but all kind of purchases. Remember that living within your means is not always bad, it is something you ought to do for your future family or loved ones. You know what you want and you know what you need. Credit card is not for splurging, it is meant to be a safety net for unforeseen circumstances.

4. Inform your creditor if you can not pay on time

Most creditors offer assistance when it comes to payment so there is no reason to not giving them a heads up. A short call will do and you can even ask if late fees can be waived. They are pretty much flexible that way.

5. Do not exceed your credit limit

Do not overspend. The safest is to stay within at most 30% of your credit limit. The credit score is based on the quantity of debt you have so if you are looking to improve it, overspending is not a great idea. Keep your balance low to preserve a good credit standing.

It may sound difficult to follow at first but once you develop a good spending habit, healthy financial life will follow.

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