10 rules for using a credit card, which you need to know

Credit cards can be a great boon if you are experiencing financial difficulties. They can give you a little respite, if you need to cover costs for rent, products or utility bills. But credit cards can very quickly stop helping you and turn into a big headache, unless you use them wisely.

Below you will find the rules for using credit cards. If you follow them, you will be able to take advantage of all the advantages that the bank offers you, and at the same time not to encounter problems that may arise.

1. Do not subscribe to any loan that the bank offers you

If you already have one credit card or another loan, then there is a fairly high probability that you will be sent new offers by e-mail. But this does not mean that you must register for each of these proposals.

First of all, think about whether you need, in principle, one more loan. If the answer is yes, then spend at least half an hour to study all the proposals and choose the one that will give you more advantages. It is important to consider such details as annual fees, entrance interest, late payments, credit limit, and any other conditions for fees on the card.

Remember, subscribing to many credit cards, you will not only increase the credit base excessively, but, possibly, and will negatively affect your creditor account.

2. Try to keep the debt on your card by 0% for as long as you can

If you use a credit card, you should know that your bank provides you with several days for which you do not have to pay interest. If you pay off all debts during this period, you will not have to pay interest for using the credit limit, and at the same time will be able to return your money in a few days.

However, this can happen only if you completely repay your debt. Allow yourself to delay payment by just one month and you will see at what rate high interest payments will begin to grow.

3. Avoid minimum payments

One of the worst mistakes that lead to problems with a credit card is to hold only a minimum monthly payment. If you spent $ 2000 and under the terms of the contract should pay 2% of the funds used, then the minimum payment in this case will be $ 40. Given the annual and monthly interest, the bank will withdraw from your account a certain amount for using the credit limit. This means that the amount that you make each month, significantly reduced. If we go back to our example, in reality only $ 8, instead of 40, will get into your account. If you stick to this trend, but over the next thirty years you will have to pay for the $ 2000 you took at the very beginning, but overpayment in such The case will be almost 7000 $.

Shocking, is not it? That is why it is very important to plan the schedule correctly and not to depart from it when you make payments on the loan.

4. Never allow late payments

One of the main rules of reasonable use of a credit card is to make payments on time. Although most people are confident that they will do this, many people simply forget about it.

Delaying your payment for a few days may not seem like a big problem, but a credit company will very quickly charge a penalty for such a mistake and even increase the interest rate, especially if this is not the first time.

If you have a lot of credit cards and it's hard for you to remember the last payday for each of them, it makes sense to put a reminder on your phone to be completely sure that you will remember them.

5. Review your application again

Erroneous transactions are not that rare for a credit card. Sometimes one and the same purchase can be paid twice by your card, but you will never know about it if you do not check it yourself.

In addition, if you use your card for periodic payments, especially those that are conducted via the Internet, you can quickly forget that fees are charged on your card every month.

By checking each month costs on your credit card, you can not only manage them, but also quickly identify gaps and erroneous payments that may have been added.

6. Immediately inform the bank if the card is lost, or an erroneous payment was made

If you ever lost your credit card or received a message that some unknown operation was performed, you know that you need to call the credit company without delay and block the account.

When your credit card gets into the wrong hands, your hard-earned loan can be used in just a few minutes. Although you can no doubt prove that your scammers used your card, it will be a long and difficult process that you can avoid.

7. Never remove cash from your credit card

Even if your credit card does not have a large percentage, you will be shocked when you find out which bank your bank charges for withdrawing cash. Firstly, later you will need to pay 2 to 4% of the amount you have withdrawn. Secondly, an immediate payment is also withdrawn, which on average is 5% of the amount of cash. In case of delay, you will need to pay an interest rate that is much higher than when you pay for purchases directly with a credit card. In addition, you will not receive an interest-free grace period.

8. Do not use the card just to earn points

Free miles in an airline, renting a car or paying at any of the many shops can all sound pretty tempting and push you to pay by credit card. You think this is one way to make your bank pay for you, do not you? But you are wrong!

The fact is that the benefit is always on the side of the credit company. They know that you have to spend a considerable amount of money in order to earn the promised points, which you can then use instead of money. They also know that you will be in doubt whether to repay the loan used before the interest-free period expires.

When the bank gets a chance to charge interest, it will immediately do it, and these payments will be much larger than those that you receive as the promised reward. Thus, instead of the expected profit, you will receive additional financial expenses.

9. Negotiate and negotiate with your credit company

Have you been a good customer of your bank for many years? Are all your loans repaid? If so, you should be rewarded with a lower interest rate. All that is required of you is simply to ask for it. Call the service hotline of your bank and inform the manager of your desire.

Once you are connected, ask for a review of your interest rate on the loan, stating that you deserve it, because you are an ideal customer. You will be surprised to learn that such a decision is often made in favor of the client, but the bank rarely does it on its own initiative.

10. Contact the bank in advance if you have difficulty paying

If you have a difficult financial situation and you do not know if you can make payments on the card in the next few months, then it's best to call the bank yourself and let them know about the problems that have arisen.

Most likely, you will be offered an alternative repayment plan. In addition to getting more flexible lines for making payments, you also reduce the chances of having a bad credit history on your card, which will undoubtedly happen if you miss or miss a payment.