Related Credit Card Article

"Some dos and don’ts of credit card use"

By Reno | August 11th, 2010 | Credit Card Guide, Featured

Whilst most people think that credit cards can be very useful financial tools, offering flexibility and convenience, they can be costly tools as well if they are used in the wrong way. Credit cards can be very effective for those that want to have more freedom when spending as well as the security of not carrying cash around, and there are a few tips that can help to ensure that you get the most from your credit card.

Some common dos and don’ts for credit card users include:

Do make sure that you pay more than the minimum required, as otherwise you could be repaying your debt for many years to come as well as paying a huge amount of money in interest. The more you can pay each month the better, and if you can clear your balance in full all the better, as you will not be charged interest.

Don’t withdraw money from cash machines if you can avoid it, as the rate of interest charges for these transactions is much higher than the norm so you will end up paying through the nose to take money out on your credit cards.

Do remember that there are many other transactions that count as cash transactions, and these will also incur the same interest charges and fees as taking cash from a machine. This includes transactions such as buying gift vouchers, gambling, and transferring money from your credit card.

Don’t opt for a rewards based credit card unless you pay the balance off in full each month, as otherwise the interest charges will most likely outweigh any reward you will earn. These cards are only really suitable for those that repay their balance in full each month and are therefore not subject to interest payments.

Do consider a 0 percent purchase credit card if you want to spread the repayments on your balance. There are a number of cards that offer a generous interest free period on purchases, giving consumers more time to repay the balance without being charged any interest.

By exercising some common sense and being more savvy when it comes to both credit card use and repayment of debts on credit cards consumers can save themselves a lot of money. Also, it is important to ensure that you choose the right credit card to make the most of your finances, as otherwise you could still lose out and spend more than you need to.

Tags: credit card, finance, Credit Cards, interest rates

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