It seems to be an easy job to manage credit cards. Some people go on a buying spree whether it is in the shopping malls or on online stores. Some people go for multiple credit cards as they are too eager to use various rewards offered by credit cards. However, reckless shopping can only get you into trouble and a lot of credit card debt that will soon become a major burden. Here are some simple strategies and steps that one should at least keep in mind to manage credit cards efficiently.
Don’t use multiple credit cards
You can always negotiate with the card issuer for better deals. If the credit card debt on one card spirals out of control and the interest rates are high, you can select from a range of good balance transfer credit cards to transfer your balance and reduce interest rates. But it is never a wise idea to have more than 2 credit cards and use them simultaneously. The reason is simple. The more credit cards you have, the more data you need to remember, including the interest rates, the due dates, the rewards, the credit limits etc. There is a chance you miss this information and end up getting into card debt, paying additional charges like overdraft fees, late fees etc.
Don’t shop if you are not sure you can pay by end of the month
A lot of people treat credit card as a gift card forgetting that it is debt that they are taking on. If you cannot be sure of paying back the debt by the end of the month, then it is not a good idea to shop on the credit card. You might end up going for rewards but you wouldn’t really save anything once you pay the interest, the late charges and other fees.
Check the fine print
Don’t go on a shopping spree before you check the fine print for the credit cards. You might remember at the back of the mind that you will get a 25% discount at a store. But only the fine print will tell you that you can avail the discount only if you shop for say 200 dollars, something that will come as an unpleasant surprise for you later. You should, in fact, make it a point to scan through the terms and conditions governing the card while filling out credit card applications itself.
Don’t shop to avail rewards
Rewards are benefits you get for using the credit card. It shouldn’t be the other way around. It is fine to let rewards expire, if they are not something you really need. For example, a reward of 50% discount at a store sounds good on its own, but if you have to purchase at least 200 dollars of merchandise, it is not a reward anymore. In fact, it is making you spend more.
Don’t ignore the monthly report
The monthly report is one of the best mechanisms to help you use your finances in a better way. At one glance you can figure out your expenditures and patterns. You would know where you spend the most money and you can also cut down on unnecessary expenses. It is also possible that you spot fraudulent charges that you can refuse to pay for.