Plastic money or credits cards are extremely popular. Convenient and accessible, you can use them practically anywhere. Credit card companies can make millions off credit cards in the form of late payments, transfers and interest, they have a bit of a bad rep. However, if you use your credit card wisely, you will find that there are actually some benefits to using them.
Take heed of the tips in this post and never get caught out again!
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Choose the right card for you
There are many credit card companies to choose from; choose the best.
The best credit card you can have is one that has good rates of interest and an open bonus system. Some credit cards usually have rewards for you, if you use it wisely. The rewards range from cash back to college fees for your kids. You can have a look at the customer reviews on a credit card before choosing it to be your plastic. These reviews will give you the best image of the credit card, and the experiences of other customers will help you make the right choice. Talk to your friends and family to see what their interest rates and bonus systems are. You can also get budgeting advise through local community organisations. I have linked some places below that you can check out.
Top Tip: Look around before settling. Don’t just choose the first credit card you come across.
Avoid carrying balances
Avoid carrying balances on your plastic. Credit card companies reward those who have a clean record when it comes to having balances in their credit cards. Paying off the balances usually relieves you of the burden of paying huge amounts of interest. Make it your aim to pay off any balance in your credit card every month.
Try setting up an automatic payment that puts a small amount your credit card every payday. This will help keep your credit card bill manageable as you are paying a smaller amount regularly rather than a large amount ever time your bill is due.
Top Tip: If you have a large balance on your credit card owning, have a look at your budget and see what you can realistically spare each payday. Pop it on your credit card. It is better to pay more than the minimum required. Not only will you pay it off faster, but you will end up paying less interest over time. Which let’s face it, credit cards have eyewatering interest rates.
Communicate with your credit card company
Learn how to communicate with your credit card company. When you have a balance that has been forwarded to the next month, pick up your phone and talk to your credit card company and see whether it is possible for the interest rate to be cut down. However, you can only benefit from such a step if you have previously kept a clean record of clearing balances with the company.
It never hurts to ask anyway. The worst thing that can happen is that they say no which isn’t the end of the world. Even if they don’t cut down the interest rate, they may be able to give you more time to pay off your current balance.
Avoid cash advances
Avoid cash advances like the plague. As a matter of fact, use cash advances only when you are faced with an emergency and there is no other way out. It is very easy to ask for a cash advance because when you get it you feel as if you have been given free money. However, these advances usually attract heavy interests and charges when you delay payment.
Think of cash advances as the last resort. Yes, they are there to help you, but do you actually and honestly need it? If you can scrape by until payday, do that. It may feel like shit not having enough money but you will be better off in the long run with a few uncomfortable days than months of extra interest to pay. Promise!!
Use these smart tips when you use credit cards and then you will not feel them be the monster that they are usually touted to be. What other tips would you add? Leave them in the comments below, you never know who you’ll be helping!
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- The NZ Government website has a list of community services that can help you with your budget from free phone call services to face to face services to support groups
- Money Talks is a free financial helpline that can link you up with a financial mentor
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