How to Use Your Credit Card Wisely

These days we hardly use cash any more and credit cards have become such a huge part of our lives that some even suggested getting a chip implanted in our hands to make things even easier. I think that one of the big problems with managing money is the fact that we don’t pay with cash any more. We just swipe the plastic and hope for the best and then when the bill comes at the end of the month, we just borrow more.

Credit card debt is a big problem in our society and its quite literally drowning us financially. Its like a monster that just keeps eating – never getting enough. Debt can grow very quickly and unless you make a conscious effort to stop it, it can quickly spiral out of control. Here are some simple tips that can make a huge difference.

Firstly, never have more than one card. If you do, start working on paying them off one at a time until you only have one card. Managing multiple cards is just too hard and the temptation to spend more is just too big when you have multiple cards – especially store cards. They are extremely expensive.

Secondly, start using cash. Stop swiping your card for everything. When you pay cash for stuff you start realizing what you spend and you gain a much better understanding of how much you have, how much you spend and what you can or can’t afford.

Thirdly, never buy luxuries on credit. Its the luxuries that really gets people in serious debt problems. Credit cards can be a great way to help manage your spending and obviously you need it to buy online and make life easier. As long as you use it for its real purpose and not for buying stuff you cannot afford. Never treat your credit card as a “loan” or as free money.

Lastly, you need to pay the full balance every month. Don’t get behind on your payments because the monthly penalties are severe and the interest is incredibly high. The golden rule is to only spend what you can afford.