We already told you that the bad thing about credit cards is not knowing how to use them correctly. So the first thing to keep in mind so as not to make a mistake with them is that the money you have in this financial product does not belong to you, rather, it is not extra money that you can spend without measuring yourself. We make this clarification from the beginning because not having this clear is the main cause of the mismanagement of this resource. Now yes, here are some tips to make good use of your credit card and take advantage of its benefits:
Be aware of your financial situation
Don’t have a credit card yet but want one? Think about whether you really need it, or better yet, if it is convenient for you to have it right now.
We help you find out: do you find it difficult to control your expenses? When you have a card in your hand, do you lose track of what you can buy? Don’t you resist offers even if you know you don’t have the money? If you answered yes to these questions, get your finances in order before you buy a credit card.
The other thing you could do if you urgently need this product for reasons such as acquiring credit experience, is to look for alternatives to avoid being tempted to spend without control. Actions such as leaving the credit card at home when you are going to expose yourself to situations that lead you to make compulsive purchases, can be effective.
Remember that the idea is that credit cards bring you benefits, not problems.
Buy products that can generate profit
We have already told you, it is useless to buy something on sale if you do not need it and you must go into debt to acquire it. That is why it is important that you buy things that can generate some return on investment, that are really useful or that you need, while taking advantage of the promotions linked to the bank or franchise of your credit card, since by doing so you can get products below its price or receive some type of ‘cashback’ (returning a percentage of the money you used to buy).
For example: if you are one of those who usually bake food and currently have an electric oven that generates a large energy consumption, changing it for a gas one can return what you invested over time, since you would be saving the high amount that you spend each month. you paid on your energy bills.
Now, if you also take advantage of dates such as Black Friday or Cyber Monday where Visa, your credit card franchise, is giving an additional 30% discount for purchases in certain stores and your bank also promises to return 5% of your payments that day, you will save even more. This is what we mean by buying products that can generate profits for you.
Choose your credit card correctly
To start taking advantage of credit cards, you must first choose the right one for you. Check what the administrative costs are, interest rates, additional expenses and if you must pay insurance or handling fees. If they charge you the latter, we recommend you look at other banks, today there are many that exempt you from this charge.
In addition, it is important that before applying for a credit card you verify what benefits it offers you for obtaining it or making purchases, for example: accumulate miles, points, receive cashback, insurance such as Assist Card, discounts at your favorite stores, etc. Finally, look at the interest rate or if it has conditions to exempt you from the handling fee.
pay on time
You must be aware of the payment date of your card so that you can cancel on time, since this not only helps you to have a good credit score but also avoids late payment interest. A trick to achieve this is to write down the dates on which you must pay in your budget, so you will have it in mind from the beginning of the month.
Save with your credit cards
One way to take advantage of these financial instruments is by saving. It would be ideal that with the points you accumulate by using them you can make a market or buy cheaper plane tickets through miles, for example. Another trick that you can put into practice to avoid paying interest and have more time to pay is to buy on an installment basis, but taking into account the cut-off date of your credit card.
Buy on a fee
How not to pay interest with a credit card? Simple, pay in a single installment. Thus, in addition to taking advantage of all the benefits that these offer you, you will not have to pay interest to the bank.
Remember that whenever you pay more than one installment, you will assume interest, unless the bank has an active promotion that exempts you from them even if you choose a longer term.
Check the account status
Review your credit card statement every month so that you can keep track of your expenses and check if they are making the correct charges.
Use your credit card for purchases that are already in your budget
If your card has benefits similar to those that we have shown you in the previous points, take advantage and use it for purchases that you normally make and that are essential in your life, such as the market, for example. Of course, pay a fee and as soon as you make the purchase, cancel that money through your bank’s app or its web portal.
Why do it? Because in this way you will be benefiting from the points or miles that you accumulate. Also keep in mind that there are credit card consumption limits that can be taken into account when declaring income, find out about them here and analyze, according to your situation, how much you could buy with this product.
Make the most of the benefits of credit cards
As we have explained, credit cards have many advantages that you should make the most of. It is useless to have a good product, if you do not benefit from it.
Investigate and pay attention to the alliances that both the bank and your card franchise have with different businesses and make smart and necessary purchases, of course.
Use the welcome bonuses
To make smart use of credit cards, do not miss the welcome bonuses that some banks grant. Whether it’s an amount of money, points or miles. Have you received messages like these?: “We give you $300,000 in the first purchase of $1,000,000” or “Request your card today and receive 1000 miles”.
Remember that using these benefits is good, but you must be careful not to fall into marketing strategies that make you lose your budget.