Credit Card Commerce Tips to Keep Debt Under Control
Credit cards get a bad reputation, but they can actually be quite a handy financial tool if used correctly. There is no reason to go into unmanageable debt using credit cards. The following credit card commerce tips can actually help you use them to build wealth rather than destroy it.
Choose the Right Card
Choosing the right card can be overwhelming, but it is worth it in the end. Be picky about terms and incentives to ensure the best possible product available. Cash back, points, fraud insurance, and low interest rates are all things that should be insisted upon. Those with great credit can get these things easily, while those without such great credit should start with the lowest limit possible, follow the rest of these tips, and work up to eligibility for great incentives.
Use them in the Right Places
One of the best credit card commerce tips available is to carefully choose when and where to use the card. Many merchants accept credit cards but as a general rule, buy only what can be paid off the next month. If you get cash back, it is not a bad idea to buy everyday items such as groceries, and even pay bills on the card. Just be certain to spend no more than you would have spent any way, and pay of the purchases immediately. Do not use them for luxuries that would not be purchased otherwise.
One exception to this rule is appliances. It is fine to purchase appliances on a credit card even if it cannot be paid off the next month. Often stores offer no interest for a period of time, so take advantage but be certain to pay it off in that time frame to avoid interest. Another perk for the purchase of big ticket items on credit cards is purchase protection. Check with the credit card company to determine what may be available.
Pay it Off
Though this is one of a couple of credit card commerce tips already mentioned, it bears its own discussion. Be ruthless when it comes to paying off purchases immediately. If an emergency purchase must be put on a card, then set a plan for paying it off. Divide the total into manageable monthly payments and make that payment each month until it can be paid off. Do not simply pay the minimum payment each month. If having the car repaired cost $1,000, and a manageable payment is $200 per month, then pay $200 each month until it is paid off regardless of what the minimum payment is.
Take Advantage of the Perks
If the perks are not automatically cashed in, such as air miles or points, be sure to use them. Use the air miles, free hotel rooms, and cash in those points for gift cards. If there are discounts, then take advantage of them by choosing the retailers where the discounts are available. Not doing so leaves money on the table.
Credit cards do not have to be bad. In fact, they can be very useful money management tools if these tips are followed.
