The primary principle of opposing credit allurement? Living inside your methods, so you do not need to utilize a card. There are various financial plan approaches: the 50-30-20 methodology, switch planning, and pay yourself first. It does not matter which one you pick; pick something you like and be reliable.
What is better than having the option to fund enormous buys, purchase the things you genuinely need, and not need to consider them for some time? Presumably, nothing.
The imposition of credit cards as a means of purchase is undeniable, from online stores growing daily to financial institutions promoting plastic use.
Credit cards have many advantages, which explains their massive use, but they can also become our worst nightmare if we do not know how to use them.
Often, we underestimate the use of these almost “magical” plastics. Still, the truth is that many headaches can cause us.
Let us see what we can do to prevent this from happening and avoid falling into fraud.
How to Effectively Use the Credit Card
Some tips that can help us:
Exit with clear purchase objectives
If we leave with a credit card in our portfolio and, without knowing that we will buy, we will surely buy more than we owe. We also probably buy things that we do not need.
We all like to go out to the shopping centers now and then, but it is one thing to go for a walk, and another thing is to enter as much business as we like. Prioritize the places that sell what you need and put aside those that sell expensive items you do not use. It is a temptation in which you can easily fall.
Define your credit limits
Generally, after a specific time, the financial institution that issues your card will extend the credit limit. They often do this without prior consultation, so you spend more than you thought. Ask yourself if it makes sense, for example, to have a limit of $3,000 if the maximum you can afford is $500.
Avoid large quota plans
In many places, card purchases are financed in several installments without interest. It costs you $600, and you can finance it in up to 6 installments; for example, it means $100 per month. It may seem minor to you, and then why not buy something more and indulge yourself? The problem is that then you will join that small fee with others. There may come a time when you cannot pay your card’s total and resort to finance. If this happens, the interests are exceedingly high, making it increasingly difficult to catch up.
Avoid paying the minimum monthly amount
When we get the statement, we see two amounts: the total card that month and the minimum acceptable payment. If you pay the minimum, the surcharges will be much higher than if you pay, even if it is a little more than the minimum. It is designed to keep you using the card, but the account will increase over time if you pay the minimum amount. Worst of all, this account will increase without having made purchases.
Think before you award additional or extensions!
Whether we have teenage children or some other relative who cannot have a card, we must be cautious about giving extensions. Never forget that we are still the real responsible for payment compliance.
As a tip, if we must give an extension, it does not exceed more than half of the credit limit. If, for some reason, the person to whom you gave an extension does not know how to handle it or does not pay the card, you will have to respond to that situation.
Credit cards are beneficial and can significantly help us to the extent that we know how to use them. They allow you to promote greater consumerism; temptations are just around the corner. The solution is not to hide and refuse to use them but to do it responsibly.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
