When you think of fiscal responsibility, what are the words that come to mind? Many people think of stocks, bonds, or saving, but few people consider Bank Cards to be responsible. The truth is, that most successful people do use credit cards, however, they are responsible with their usage.
To help you get the maximum value from your credit card, choose a card which provides rewards based on the amount of money you spend. Many credit card rewards programs will give you up to two percent of your spending back as rewards which can make your purchases much more economical.
Look into whether a balance transfer will benefit you. Yes, balance transfers can be very tempting. The rates and deferred interest often offered by credit card companies are typically substantial. But if it is a large sum of money you are considering transferring, then the high interest rate normally tacked onto the back end of the transfer may mean that you actually pay more over time than if you had kept your balance where it was. Do the math before jumping in.
Pay 100% of your credit card bill each month if you can afford it. Ideally, bank cards should only be used as a convenience and paid in full before the new billing cycle begins. Using bank cards and paying the balance in full builds up your credit rating, and ensures no interest will be charged to your account.
Only take cash advances from your credit card when you absolutely have to. The finance charges for cash advances are very high, and very difficult to pay off. Only use them for situations in which you have no other option. But you must truly feel that you will be able to make considerable payments on your credit card, soon after.
If you would like to use a credit card, you must understand the ins and outs. This is because the truth is that credit cards, while useful, can also be dangerous in the wrong hands. You need to be aware of the common traps that happen with credit usage, in order to avoid them.