Recommended Practices to Manage Your Credit Cards

Credit Cards

Credit cards have become one of the most essential accessories for shoppers thanks to their incredible convenience. These little pieces of plastic allow shoppers to buy as they please without much restriction on the amount of money they have on hand. However, if you cannot manage your expenses, then these cards can present a risk to your financial health. It is better to be smart when using these cards. Here are several recommendations you can use to manage and regulate the use of your credit cards.

Make Thoughtful Selections with Your Card

There are so many financial institutions that offer credit card services to users. Many of them provide special features, such as paying cash back or offering unique interest rates. When you choose a credit card, be sure to factor in these special features in your choices. It is recommended that you choose the best card for your unique spending habits. For example, if you are an active Amazon shopper, then choose a card that provides excellent cash back service for online shopping. If you are already managing high debt, then choose a credit card with low interest rates.

Take Advantage of Cards without a Penalty APR

Very few credit card users might have gone through the detailed terms and conditions about their usage. If you read them carefully, many specify the penalties you may incur if you mishandle your credit card usage.  Many credit card service providers follow APR penalty-based hiking for interest rates. They often tend to be 20% or in some cases, 30% higher than normal rates. This can place you in a serious financial hole. As per current rules from most banks, if you are late with card payments and your account is under debt for more than one year, then you are likely to face a heavy penalty APR. Even if your payment is delayed by just 60 days, you may still incur the penalty on your account balance. To stay away from such headaches,  use more cards that have no penalty APRs.

Maintain a Healthy Credit Score

The final recommendation is to maintain a good credit score. A higher value can help you in the long-run in terms of making lower car loan or mortgage payments. A great score can also help you earn more benefits and rewards from your current credit cards, which can potentially save you thousands of dollars in the long-term. In order to maintain a high credit score, pay all your bills on time and make sure your expenses do not exceed the credit line.

Credit cards make shopping more convenient, but its benefits go as far as how responsible you are in using them. By being smart with your spending habits and taking advantage of benefits when they are available, you can enjoy the convenience of credit cards without placing your financial health at risk. The next time you open a credit card account, consider these recommendations to save yourself from future headaches and financial problems down the line.

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