Introduction-
According to government reports, the people of Singapore love to shop and 3/4th of them own a credit card. But not everyone uses a credit card wisely. The reason people are fond of credit cards is that it gives them the freedom to shop without limits. Credit cards are making people happier as they experience financial freedom while using them. But all that glitters is not gold. Just like everything else, credit cards also come with their risks. If you don’t follow the safety measures, while using a credit card, then you can potentially jeopardize yourself financially.So here are a few suggestions to make sure you can use your credit card wisely, take a few minutes to learn the tips given below,
Use your card at trusted merchants-
There has been an unconventional hike in online shopping via credit card, in recent months. As a result, frauds related to payments have also increased drastically in Singapore. To avoid these risky situations, you should properly understand how to use credit cards wisely. The very first tip is to buy from a well-established and trusted shop or store. Even if a certain store is offering lucrative deals, you shouldn’t let your temptation get the better of you, because otherwise, you will end up being ripped off. For the sake of your hard-earned money, you should let reason and rationale prevail over instant gratification.
Be alert with your Credit Card usage-
The use of a credit card gives you freedom but then you should know that anything beyond a certain limit could wreak havoc. The second tip on how to use a credit card wisely is to make a budget for your credit too so that you won’t be able to spend above it, thereby avoiding financial doom. You can keep track of your spending limit by monitoring it at an interval of every 10 days. Another advantage of monitoring is that you can improve your credit score by keeping your credit card balance below 50%.
Make credit card bill payments on time –
To conveniently use credit cards you should pay the bills promptly because it affects your credit card score. There are many disadvantages of not paying credit card bills on time such as credit card companies charge high-interest rates on the outstanding balance. The interest will increase every month and in the end, you will be penalized.
Using technology –
To monitor your payments, monthly expenses, credit score, etc. many banks provide their apps and via these apps, you would be able to know more about how to use a card wisely, some suggestions to help you pay attention to your credit card are,
- Alerts by text message, email, or phone.
- Instant transfer from your one account or to another account.
- Online, mobile phone access to your account.
- Credit card with an automatic spending limit.
Create and stick to a budget-
As you have understood already that your habit of reckless spending can damage your credit score and even you can be financially broke so here comes another important tip on how to use a credit card wisely i.e. to create a realistic budget and follow it properly. You should also pay your card bills every month in full and you can even tell someone in your relatives to remind you now and then to pay your bills. But if you are not able to pay the full amount you should at least pay more than the minimum to avoid the heavy interest rates.
Follow the rewards-
Here comes one of the best and most loved tips on how to use a credit card wisely i.e. to take a credit card from the bank where you get exciting rewards. The first thing, after checking the authenticity of your bank, you should do is to check the rewards scheme. By paying on time and keeping a good credit score you can maximize your chances of getting delightful rewards. The banks give rewards such as free plane tickets, movie vouchers, discounts on electronics, free access to airport lounges, and whatnot.
Pay off high-interest credit cards first-
Do try to check your credit report to know all the details. You should know that high-interest debts are like the cancer of credit cards as they will throw you in the sea of bad debts. So you should make sure to pay the bills of the card that has a high- interest rate. By doing that that you can keep on enjoying the credit card facility all your life.
Even though Credit cards are tempting, you should know when to stop because you have to return what you borrowed, eventually.
So keep an eye on your spending limit, otherwise, in the end, you will regret getting a credit card.
Lastly, an unavoidable tip in this era of fraud marketing, on how to use a credit card wisely is to be aware of the promotional offers given by credit card companies, as they lure their customers by giving exciting offers. You should check all the terms and conditions before using it.
