Are you practicing safe credit card usage?

credit card flying with youWe all love to use credit cards for their convenience but are you using them to help simplify your personal finances or is your credit card usage making your personal finances more difficult.  For example, we sometimes forget to make that monthly payment or our balance keeps getting larger and larger and we feel overwhelmed.  The only way to stop the bleeding is to stop using the credit card completely.  However, if you use your credit card properly you will not have to stop using the credit instead you can use the credit card to your advantage.  It can even become a valuable tool to use to simplify your personal finances.

Here is what you need to do to make sure you are practicing good credit card usage:

Payoff your balance at the end of each month – This is a must do every month.  If you want to simplify your finances as well as avoid unnecessary debt you must pay off the balance each month.  If you do not you will be paying unnecessary interest payments.  So only charge what you can pay off at the end of each month.

Spend within your budget – Do not charge things that you are unable to pay off.  If you did not budget for the purchase this month do not use a credit card to pay for it.  Yes, I know it is very easy to just use your credit card because of the convenience.  But think before you use it.  Also you do not want to spend more than your credit card limit.

Pay on time - make sure your credit card payment is paid on time.  If not you will incur those dreaded late fees.  One way to avoid this is to set up auto pay from your checking account to pay your credit card to make sure it is paid on time.

Avoid applying for unnecessary cards -Yes you may receive an offer for zero interest for six months or receive ten percent off on your purchase.  But think before you say yes to this offer.  Why do you want to add an additional card to your existing credit cards.  That is just another card payment you have to keep track of.  Before signing up for new credit card call your existing card company to see if they will match the offer you received.  Think before you say yes and ask yourself does this card fit my lifestyle and do I really need another card?

Limit the number of cards -You do not want to carry more than two credit cards with you.  Why would you need more than two cards?  The more cards you carry the more likely your going to spend.  Also if by chance you lose your purse or wallet that’s one more card someone can have access to.

Monitor your interest rate – Know how much interest your being charged.  Many times you do not know the interest rate you are paying because the balance is paid off at the end of each month so your not charged interest, which is a great reason.  However, if you are carrying a balance you may be charged a high rate of interest when its not justified.  Also your credit card company may raise your rate from the time you initially signed up for the card so you want to monitor the rate.

Reduce your credit card debt – If you do not have any outstanding credit card debt congratulations but if you do have outstanding debt you want to reduce this debt as quick as possible. Getting out of credit card debt is not easy so set a goal to begin reducing this debt.  You will be amazed at how much you can accomplish by simply setting a goal and taking action to reach your goal.

If you want to simplify your personal finances take action now by following these simple tips to make sure your practicing safe credit card usage.   Which tips do you plan to implement now.  Do you have other tips which have helped you simplify your credit card usage?


  1. says

    I’m proud to say that my wife and me are using our credit cards correctly :-) Although after we got out of debt many years ago, we’ve been VERY CAREFUL about that!! Don’t want to backslide!

  2. says

    This is a topic near and deal to my heart. My husband and I stopped carrying a balance on our cards about 10 years ago and we’re so glad for it. I would never go back.

    I think the key reason we’re able to pay off our accounts so consistently is that we have an emergency fund. For many people their credit card is their emergency fund — certainly that used to be the case for us — but once you have a couple month’s expenses in the bank you have the reserves to handle much of what life tries to throw at you.

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