Be Credit Card Wise

Human beings love getting their hands on all the luxuries of life. The more they get, the more they want and thus, the vicious cycle of insatiable hunger to possess the best of things continues. There is no end to it. However, everyone runs on a specific budget constraint, and straying from the constraint is what leads to all the trouble. The budget constraint has ceased to matter in an era dominated by credit cards, and thus, human beings have let loose of their desires.

With credit cards at your beck and call, you could indulge in a shopping spree like never before without having to worry about your bank balance. No, wait there! There is a catch. You might not have to worry about your bank balance initially as you go about shopping to your heart’s content, but you definitely have to pay back the amount that your ostensibly friendly bank has allowed to draw. Therefore, if you have been thinking that owning a credit card is the be all and end all of your happiness, you need to snap out of that illusion at once and allow the reality to sink in.

So it goes like this. Sure, having credit cards is a great thing. However, you need to be cautious about the way you deal with it lest you might find yourself in precarious legal situations. Several families had to forego their happiness and peace in a bid to settle the complex web of legal actions that they were caught up in as a result of not being able to pay back the credit amount on time. The motto of this article is to thus, suggest smarter ways in which you can handle your credit cards.

How Do Credit Cards Work?

Credit cards work on a simple principle. Your bank allows you to spend up to a specific limit, depending on how much you seem to be capable of repaying the amount on time. You do not have to pay any interest on the credit amount if you pay back within the month or whatever the time period your bank allows you. However, the moment you miss the deadline, the bank will start charging you interest. Now, what happens when you exceed the other deadline too? The bank will restrict your credit amount to a bare minimum, thus, revoking your perks. In worst case scenarios, your friendly bank will cease to be amiable and might proceed for legal actions.

Credit cards are a risky business, and you can never be sure of your safety. You need to be cautious while treading on the rough waters and adopt all the precautions to avoid being implicated by law. It also does well to check for the credit card eligibility before you decide upon applying for one.

The Plus of Credit Cards:

Though so far, only the complications that might arise from using credit cards have been discussed, yet it is crucial to know that credit cards are not just gloom and doom. The entire concept of credit cards has been brought into the lives of human beings with a reason- to help people in urgent financial needs. It is not always possible to carry cash on you, and emergencies do not wait for an invitation or an opportune moment. Thus, with credit cards by your side, you can always avail the services that you might be in need of. One of the greatest pluses of having credit cards is that you are at a lower risk of losing money. For instance, if your card is stolen or lost, you can always call up your bank and block your card. However, that is not the case with cash. Once your money is stolen or lost, chances are that you might never get the amount back.

The Sound Ways to Use a Credit Card:

We have now come to the most critical segment of the article. We shall now look into smarter and wiser ways to manage credit cards and avoid legal and financial complications.

Do Not Be a Defaulter-

First things first. You have to make sure that all your bills are paid on time and in full. Missing out on the deadline means a heavy interest being charged on you by your bank. It would, therefore, perhaps be a wise move to keep a note of all the important dates and pay the bills accordingly.

Make Use of the Reward Points-

You must make use of your reward credit points to your advantage. The reward points are bestowed upon you for a reason and come in quite handy when you spend them on goods and services as affiliated by your bank. You could use those points on shopping for groceries or booking tickets if the service is permitted. Therefore, making use of reward points is a skill and a smart way to use your credit card.

Check for Lower Rates-

You might find your emails being swamped in with offers on credit cards with lower interest rates which might be tempting. However, do rush and try to negotiate for a lower interest rate with your already existent bank. Some banks go out of their way in a bid to avoid losing good customers and lower their rates. This is easily a win-win situation for you.

Less Is More-

This should be your mantra while using credit cards. Resist being tempted by the offers of various banks and do not go for multiple credit cards. Keep a tab on the number of cards you use and refrain from using more than you need. More often than not, people even with a steady flow of income find themselves unable to manage the bills and miss out on deadlines. They might even inch towards the brink of being a defaulter. Therefore, be careful with the number of credit cards you use.

Opting to use credit cards to live the life that you have always wanted, does not have to invite in trouble, only if you are enlightened enough about the smart ways to use your card.