Credit cards are the most widely used plastic money worldwide. They have become an integral part of our everyday life, with all of us carrying them about in our pockets, or attaching them to our keys or purses. This also makes them the most widely misused financial instrument in the world. While many people think that a credit card is nothing more than a glorified checkbook, this is far from true. A credit card is much more than a checkbook.
First, it is usually possible to “top up” your credit cards on-line at any time by visiting the company’s Web site. This may allow you to add funds to your account by simply entering in information such as your name and address, and possibly where you live. You can also top up your account by using your debit cards at certain participating merchants. This gives you the convenience of having cash in your hand without the hassle and expense of carrying large sums of cash.
Second, it is important to monitor your credit cards to ensure that you are not creating any potential risk factors for yourself. If you do find yourself making purchases on your credit cards that you do not intend to make, for example, by using them to make payments for items you do not have, this is an obvious sign that you may be creating a potential risk for yourself. For example, if you do not intend to make any new purchases for three months, this would be a good time to stop using your credit cards, so that when the time comes to purchase, you will only use debit cards, which will incur no interest charges. There are many different ways that you can monitor your credit card spending and the more convenient you make it for yourself, the less likely you are to be overspending.
Third, if you are someone who often uses credit cards, it is likely that you are not even aware that you have a credit limit. Most people only realize their credit limit when they apply for a new credit card or when they try to charge an old debt off of a new one. Some consumers are actually unaware that they have ever been charged a credit limit, as well. Therefore, it is important to make sure that you are aware of your credit limit and how much you owe before you attempt to charge it. In fact, some credit companies will penalize you for charging past your credit limit, which means that if you do not pay off the entire balance within a month, you could find yourself on a one or two month repayment plan. Therefore, it is imperative that you know how much you owe and make sure that you are not going over the limit.
Fourth, if you think that a credit card is a card that you should get, you also need to be aware that many issuers charge a high annual fee for them. If you are someone who makes a lot of purchases each month, you may want to think about getting a credit card that offers cash back or rewards programs instead of having to pay interest. This way, you can save money in the long run and pay less money at the end of every month. However, if you are a person who rarely makes purchases, you may want to just get a card that offers regular credit payments so that you do not have to worry about paying interest and is more likely to help you build a credit history over time.
Lastly, you must know how much you will be able to charge on your credit cards before you apply for one. Some issuers will only let you charge a certain amount due on a monthly basis while others will allow you to have up to a certain percentage of your total purchases charged to your account at any given time. Therefore, if you only purchase a certain amount of groceries at a time, you may want to consider getting a credit card with a larger credit limit. However, if you plan to make a lot of purchases each month, you should probably just go with a card that offers cash back or other rewards programs.