Many people remember the day when they received their first credit card. For some, it may have been a birthday present from their parents. For others, it was an acquisition they earned in adulthood.
What many people have in common is their initial misuse of a credit card. As they get into a rhythm of using the card, they suddenly feel that they can buy anything they want. Before they know it, they owe large amounts to a credit card agency.
Learning proper credit card care when you first get your card helps you avoid these problems. If you want to get the most out of your credit card, you’re in luck!
In this article, we’ll explore the strategies that do more with your credit card than you ever realized. Let’s get started!
Why You Need Credit Card Care
Using a credit card can bring many long-term advantages. Building a positive reputation with a credit card company can earn you higher spending limits. As you continue to pay off your balances, you can increase these limits further.
While you continue to increase the balance, you can build a higher credit score. With a higher credit score, you’ll have an easier time getting car loans, rent agreements, and mortgages.
To accomplish all of this, however, you must follow some essential credit card care strategies. We’ll explore these strategies in the rest of the article.
Set a Budget for Your Pay Period
Credit cards help you make large purchases, but you shouldn’t default to using them for purchasing items you can’t afford. Instead, keep a realistic picture in your mind of how much you can spend. Then, pay at the end of the month.
The more accurate your budget, the better you can plan your spending. This way, you avoid burying yourself in debt with your first card.
So, what are some budgeting strategies? One idea that many people use is the 50/30/20 approach. Use approximately 50% of your take-home pay on things you need, such as housing costs or weekly groceries.
Next, keep 30% of your money for things you enjoy but don’t need. These things could include your streaming services, subscriptions, pleasure purchases, etc. Lastly, keep 20% of your money for savings and debt payments.
If you’re in a more stringent financial situation, it may be wise to switch the 30 and 20. You could keep 20% of your money for entertainment and pleasure while devoting 30% to savings and debt.
However you break up the money, this strategy helps you avoid overspending. Your credit card follows your monthly income with general accuracy.
Monitor Your Purchases
Keeping track of your purchases is the essential step to ensuring you follow your budget. It may help to use your card’s app or website for this.
Each time you swipe or insert your card for a transaction, your credit card company keeps a log of it. This way, they can determine how much you owe on your balance. However, it also helps you ensure you stick to your budget.
To get an idea of how your card log works, check out farmers credit card login. Once you log into your account, you can see how much you’ve spent on your card each day.
Establish Automatic Payments
Sometimes, life becomes chaotic. It’s easy to lose track of what payments may be due and when. To avoid this threat, schedule automatic payments with your card.
By scheduling these payments, you can ensure you stay ahead of your due dates. In doing so, you can avoid the potential for skyrocketing interest accumulating on your balances.
Consistent payment history is also a critical factor in determining your credit score. When creditors see that you pay your balances and bills regularly, they become more inclined to give you money.
Don’t Push Your Credit Limit
It may be tempting to max out your credit card. After all, they give you a high credit limit for a reason!
As much as you may want to max out the card, avoid it as much as possible. While you can max out your card, the amount of credit you use is another factor that determines credit scores. Carrying a high balance for months on end can damage your score.
Pay Your Bills and Check Your Statement
Credit card companies give you the option to make minimum payments each month on your credit card. This option may seem easier, but it can cause headaches in the long run.
The longer your balance goes unpaid, the more interest the card accumulates. As this extra money builds, it gives the company more opportunity to make money off of you. It also contributes to a financial burden you’ll have to bear.
Why let somebody put you through that? Instead, pay your bill in full whenever possible. By repaying credit in this way, you avoid letting credit take over your finances.
Likewise, make sure you check your card statements regularly. Each month, the credit card company sends a statement to its users that lists the transactions you’ve made over the last cycle.
When you receive these statements, examine them. Errors happen more frequently than many people realize. If you notice any abnormalities and errors in your card, contact the credit card issuer to resolve the issue.
Rewards and Other Benefits
Some people use a rewards credit card as their first card. Examples of these include Wal-Mart, Target, and Best Buy credit cards. If you have such a card, take time to familiarize yourself with the rewards program.
Use these programs to your advantage. Reap as many cashback or rewards points opportunities as you can!
Likewise, many credit cards offer additional benefits that users can receive. Learn these benefits and find ways to earn as many as possible.
Start Using Your Credit Card
The key to credit card care is maintaining a balance. To get the most out of your credit card, you’ll need to develop some discipline. However, you can’t let yourself get too afraid of using the card for fear of debt.
Instead, find the sweet spot. Use these strategies to learn wise uses of your credit card.
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