Caught in credit card debt again? Ease of use and worldwide acceptance, consumers outstretch their spending power. Many of these choices are not the best decisions for personal financial situations. Overspending is never a good idea. If you have good money management and can control over shopping, you will discover that owning credit cards comes in handy. Believe it or not there are some smart uses for credit cards. Responsible spending is always the key. Credit cards will come in handy in certain situations.
*Online shopping. Credit cards are a smart choice to use when shopping online. They carry strong warranties, return policies and fraud protection. Consumers must pay attention to their budgets and shop according to their income’s affordability. Overuse can turn a smart use into a financial failure.
*Big purchases. Credit cards are usually not recommended for large purchases. When promotions break up the price into zero interest installment loans, it becomes a smart decision. You can leave your savings alone and take advantage of paying the debt off each month with no additional cost. It is important to make sure you pay it off by the end of the promotional period. If you are running out of time, dip into your savings and get it paid. The last thing you want is accrued interest added to the balance at a now much higher interest rate. Be smart to use promotional credit and pay it off on time.
*Renting a car. Most rental agencies will not rent vehicles without a credit card to hold the transaction. Debit card use creates a hold on money in your bank account. You will not have access to this cash for several days after the rental agreement expires. Use a credit card to rent a vehicle.
*Travel. It is much safer to use a credit card while away from home. If you lose cash, it is gone. If you lose your credit card or if it is stolen, you can call your credit card company for help. Most large companies will replace your card within 24 hours. They will protect you from any fraudulent charges which may have occurred before you noticed it missing.
*Hotels. Like car rental agencies, hotels will block a portion of your credit limit for the duration of your stay. Debit cards will have bank money blocked that may be needed elsewhere. The hold is not lifted immediately at check out, so stay safe by using credit to hold the room.
Smart credit card use helps your credit score.
These smart choices are only helpful when there is enough available credit on your card. It takes many smart choices to manage debt. Keep less than 30% of your available limit on your card at once. It is always smart to keep certain cards set aside for emergencies.
It’s good to use credit cards. Proper use builds credit scores and promotes lower interest charges. Be smart in how you use them. Make sure to have a payoff plan with every purchase to keep credit card debt from hurting the budget.
