4 Things You Should Know About Having a Credit Card

Credit Card - Complete Controller

A credit card is a financial instrument that works as a means of payment that can become a financial burden for those who do not plan their finances before the due date. Credit cards are a double-edged sword. On the one hand, they can help make necessary purchases, cover emergency expenses, or get the user out of financial trouble. On the other hand, they can also become a catastrophe for those who do not plan their finances and those addicted to compulsive purchases. It is also used to obtain credit from banks, and the issuers grant the user a revolving line of credit through a contract. Check out America's Best Bookkeepers

In the US, there are about 25 million credit cards, and the rate is only increasing. On average, the debt of those who have lost control of their cards reaches about $10,000. This debt is fairly common. However, having a credit card is not all bad.

If you’re using your credit cards sensibly, no adverse effects will follow you into debt. Instead, you’re all set to reap results that’ll make you financially stable. There are bonuses added to your balances when you are managing your credit cards correctly. There are many benefits to having a credit card, from rewards both with your credit card company and partners to cash backs on specific purchases. Here are four things you should know about having a credit card to use it responsibly. Check out America's Best Bookkeepers

Know All the Costs

Before deciding to acquire a credit card, it would be helpful to keep in mind all the expenses that come with it: annuity, interest rates, fees, and commissions. These costs can hurt your finances and cost you a fortune if you don’t consider them beforehand. Many people are happy they qualify to have a credit card and a line of credit and don’t consider these costs, which can come back to haunt them later in keeping up with payments. One way to cut these costs when you hold a credit card is to pay the balance as quickly as possible. Not only will paying your credit card balance avoid some of the costs, but it will also positively build your credit.

Payment Schedules

Living and spending outside your monthly means by using a credit card or any line of credit can be a dangerous thing to do regularly. We have to keep this danger in mind when contemplating purchases of things that are not necessities. When you are going beyond your income regularly, the adverse effects will eventually catch up to you. If you are making only minimum payments or not meeting these payments, it won’t take long to be drowning in debt.  

Hence, following this basic rule, having a credit card does not spend more than you earn. And always keep your balance low enough to pay the balance in full each month or at least make above the minimum payment. Your payment schedule should always be above the minimum requirement, or you will soon be living to work for the profits of the credit card company and not you and your family. Check out America's Best Bookkeepers

Be Responsible

When using your credit card, you must keep in mind that small debt with interest and fees can get out of control in mere months. If you are making purchases greater than your means regularly, this can have devastating results because it stands to reason that you will get swept up in debt even with payments. If you put off your payments for even one month, you can also find yourself losing control of your credit card debt. To avoid this, you should use your credit card only for things you can afford to pay back within the month. You should also always make payments above the minimum and avoid using your card again until you have a zero balance as much as possible. For best results, you should only be using your credit card to build your credit, to cover emergencies, or to give you the ability to buy something between paydays that you can easily pay back when you do get paid.

Alternative Lines of Credit

If you find it difficult to stay out of debt because of the interest or the temptation to use your credit card more than you should, for emergencies or occasional big purchases, you should look into other lines of credit. There are hundreds of online small loan companies that, even with bad credit, will give you a small loan up to $1,500. While these loans can potentially give you difficulty if you can’t make payments, they are at least limited and don’t give you the possibility to keep getting further into debt with revolving credit like with credit cards.


Credit cards can be a great financial tool and a useful form of payment as needed. The credit card itself is not a bad thing to have for emergencies or to tide you over until payday, but you have to keep in mind that it should not be used to live outside your means, or you will end up drowning in debt.

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