A credit card can be a reliable companion in times of dire financial straits and a great tool for building healthy money habits when it’s used responsibly. Card holders can rely on their cards for additional sources of much-needed financial relief during lean periods or for quick rescues during emergencies. But using any credit card also comes with a few caveats, and no matter what the spending limits or terms and conditions are for any card, it’s in the card holder’s best interest to always practice discipline and due diligence.
While a credit card can help you manage financial duties and expand your capacity to live a fuller life, bad spending habits can quickly sabotage your money and life goals. Don’t let poor credit card habits get in the way of your financial success; here are five tips for closely watching your finances so that you can avoid the pitfalls of common credit card use and maximize the benefits of an excellent credit card program like that of the Landers Cashback Everywhere Credit Card by Maya:
1. Pay on Time, Every Time
One of the basic rules for keeping a healthy credit score is to pay your credit card bill on time. This simple, straightforward piece of advice can significantly influence your experience as a credit card user; one missed payment can easily get you into a debt cycle if you’re not careful. Additionally, it’s wise to not just pay your balance on time, but also in full to avoid both late payment fees and interest charges.
2. Practice Credit Card Safety
Keeping your money and your information safe is the duty of both the card issuer and the card holder. You can expect the most secure credit card to have all the requisite safety and authentication features in place, but taking these for granted could end with you falling victim to any of the scams spreading online and offline. Once you receive your credit card, make sure to always keep it safe by signing the signature panel at the back of the card and by remaining vigilant whenever you carry it in your bag or wallet and every time you use it.
Aside from keeping an eye on your credit card’s physical security, be mindful of your online safety as well. It is strongly advised not to share sensitive information such as your passwords, card verification value or CVV number, and credit card account number with anyone, as doing so can compromise the security of your account.
Furthermore, when paying or shopping online, always check if you have the correct URL and see if it starts with “https,” which signifies that the data you send can only be viewed by the intended recipient. Moreover, don’t entertain fraudsters that might pretend to be bank representatives or other individuals asking you for bank details or your one-time password (OTP). Remember that by keeping your card and your data safe, you’re also protecting your finances.
3. Only Buy What You Can Afford
As with all money matters, the same fundamental law applies with credit cards, and that is to spend within (or below) your means. Contrary to what many might believe, having a credit card is not a license for unlimited spending and mindless purchases. In fact, being a credit card owner requires prudence, and even restraint, since reckless spending can lead to lasting financial consequences.
It’s generally advised to use only a little of your credit limit; around 30 percent is considered a reasonable threshold. Setting a conservative credit spending limit ensures that you can realistically keep up with payments, and this will help you carry over good money spending habits to your credit card practices.
4. Use Your Card as a Budgeting Tool
A credit card may offer short-term financial flexibility especially when you most need it, but you should also think about building sustainable habits to make this tool work for you in the long run. While it might be tempting to use your credit card for unimportant purchases, a better strategy would be to use it for your needs and not your wants.
With most banks now offering online banking services, complete with real-time transaction monitoring, it’s easier than ever to track your spending with your credit card. It’s also a breeze to pay bills for utilities and other essentials with your mobile app, which better helps you avoid penalties. Plus, you can use the rewards, cashback points, or rebates you earn to pay for future bills, helping you get the most out of your credit card as you apply smarter spending habits.
5. Check Your Credit Card Charges
As a credit card holder, it goes without saying that you should have a sufficient understanding of your credit card’s terms and conditions. And part of due diligence as a credit card user is to carefully review your statement of account (SOA), not just to see how much you have to pay and when, but also to check for any errors or unfamiliar transactions.
Upon receiving your monthly SOA, thoroughly check each item and pay attention to any transactions or fees that seem suspicious. If you suspect an unauthorized transaction or a billing error, call your credit card issuer immediately to have these rectified. Also, be aware that some credit card companies offer a membership fee waiver under certain conditions, so if you see this charge in your SOA, call them to ask how this can be reversed.
It’s easy to get carried away with the convenience and freedom of having a credit card, but always keep in mind that these liberties come at a price. As a credit card holder, you should take control of your finances instead of letting the consequences of bad money habits control you. Once you learn how to put your financial wisdom into practice, you can stand guard of your credit card spending and ultimately gain complete command of your financial future.