How to use credit cards
Congratulations on acquiring your first credit cards. Getting your credit card is one of the major financial steps you’ve to take. Having gotten your card, the next is how to use cards.
It must interest you to know that a credit card used properly can offer a very flexible way of covering most of the unexpected expenses. However, it’ll help you build a good financial reputation. Though, consistent use of credit card may lead you into becoming potential long-term debt financial crises.
So, I think it’s very important you understand how to use credit cards and how not to use a credit card. It’s fun to use a credit card just swipe the card through the card reader and walk away what you’ve purchased. But then, that’s not all it’s to use a credit card. Because if you don’t know how to go about it, you’ll learn to stay out of credit card issues.
How to use Credit cards
Knowing the basics of using credit cards is very important. It’s as important as knowing how to use credit cards. Here, the role of the credit card issuers becomes very significant. The card issuers make money available for you to borrow any time you want.
One basic thing you should know is that you must stick to the terms of the agreement you entered with the credit card issuers. The first step is paying on time and staying within your credit limit.
Secondly, you must not use your credit card to commit any fraud or buying any illegal items. You must repay on time any purchase made on your credit card, but your card issuer can give you an option to repay your balance over time.
If your credit limit is $1,000 and you’ve a balance of $500, you have a $600 credit available for your future purchase.
Though if you plan to pay over time, you’ll have to make at least minimum monthly payments each month at a due time. If not, you’ll face some penalties for late payments and with some charges as interest.
How to choose the right credit card
You don’t have chosen any credit because of some mouth watery offers you’re lured with or just an offer via an email. Credit cards come in different types and at different fees, rewards, and interest rates. Below are the tips on choosing the very card that’s safe for you.
- Choose the type of credit card you want: You can choose to use the card to pay off a balance with a very low-interest rate or you want great rewards on purchase? Or you want to make a huge purchase with little or no interest rate? Then you’ve to build your credit. You can choose from any of these types of credit cards.
- Plain Vanilla or Standard credit cards: This is a basic card that doesn’t offer any of the special benefits to users.
- Rewards credit cards: This card pays cash back, point rewards or miles on your purchases.
- Low-interest Rate Credit card: It offers a low rate of interest on purchases. This kind of interest is offered to both balance transfer and purchases.
- Premium Credit cards: Offers high rewards and good luxury perks, though this credit card also charges a high annual fee.
- Balance Transfer credit cards: Balance transfer credit card offers low a rate on balances you transfer to the credit card.
- Retail credit cards: This is the type of cards you use on a just specific retail store.
- Student Credit cards: Students credit cards if for young people you’ve enrolled in an accredited four-year institution or University.
Before you finally choose the credit card to consider the following:
- Check the fees for the card and the interest to pay
- Compare other credit cards
- Know your credit value/rating
As soon as you’ve chosen a credit card, go ahead to complete the credit card form of application online. Then, take time to know if you’re approved for the card.
Knowing and Understanding credit card Fees
Credit cards go with some fees. Well depending on how you use the card. Credit card offers are as follows:
- Annual Fee: How to use a credit card is very important depending on the fee your issuer charges. Some charge once a year while some may consider waiving your annual charge for the first year.
- Late Fee: Some credit card issuers charge a late fee if you pay your monthly charges less than a minimum or for paying after the due date of payment.
- Balance Transfer fee: For transferring a balance from one credit card to another, you’ll be charged a balance fee. This is a kind of a percentage of the amount transferred.
- Cash advance feed: if you withdraw with your credit card above your credit limit, you’ll be charged a cash advance fee. The amount the issuer will charge you still depends on the amount you’re transferring.
- Finance Charge: Anytime you carry a balance on your credit card, you’ll be charged interest known as the Finance charge.
- Foreign Transaction Fee: For purchasing items on other currencies, you’ll incur a charge from the percentage of the transaction. Though you a may get a waiver for some items on certain credit cards.