Proper Use of Credit Cards

When it comes to paying purchases, there’s no question that credit card is the most convenient mode of payment since we don’t need to bring too much cash in our wallets.

But after using “plastic money”, what do we normally do once we get home? Do we pay the credit card company immediately? Or we wait for the billing statement and pay only the minimum and we allow the bank to charge us interest?

I am not trying to make myself clean when it comes to these kind of things because I was once hooked by the credit card mania.  After using the card senselessly, I just waited for the statement and just pay for the minimum amount. There came a time when I no longer know how to pay for it. I got into several loans just to pay for the credit card.  Talking about financial ignorance. I simply did not live within my means. Salary is being spent out even before receiving it. And that it due to the improper use of credit cards.

So after painstakingly developing the discipline, one by one I first paid credits with the highest interest rate.  Cut off cards, with “hidden charges”.

Please don’t get me wrong, credit card is not evil. It is actually a tool which if used properly may also bring in peace of mind. Personally, credit cards must only be used in emergency situations when we have no immediate available funds. It should not be used to fund our lifestyle.

Right now, I only maintain one credit card and sometimes use it for items such as grocery, clothing, medicines, car maintenance, etc. But I make sure that when I get home, I pay all of it via online banking.  Though there were times that I’m not capable of paying 100%, I make sure that I pay at least 90%. So by that, I maintain my credit at a minimum level.

So think twice if we are a planning to use the credit card. It would be much better if we save for something we wanted to buy. Do not buy on impulse. We might realize later that we don’t need that item we wanted to purchase especially if it is a want instead of a need.

Advertisements