There was a time when I was really excited to have a credit card.
The bank kept giving me more and more money so I kept taking it.
Why not? I was 20 years old, didn’t own a house, and had very few responsibilities.
So when they offered me a line of credit to go with the credit card I thought, “sure! more free money!”
It took a long time to pay those baby’s off!
That’s why I think it’s important to be knowledgeable about credit and how to use it efficiently. I think it’s important to teach our children and each other about the dangers that over extending ourselves can cause and that it’s okay to go without sometimes.
A penny saved really is a penny earned.
Kristine Vicencio is here to help me express how important it is to understand the use of credit and how, when used effectively, it can help you.
How to Use Credit Cards & Remain Frugal: Seven Tips
Credit cards are more than just fun and convenient ways to spend money. Responsibly by using a credit card as a tool and paying off the balances every month has many money saving advantages. You can get more tips like these from here.
1. Banking and Emergencies
Use your card to balance your budget more smoothly so you can avoid penalty fees and bank overdrafts. When credit card balances are paid in full every month, they can be treated as part of your expendable income. This can come in handy for households that have erratic income. A credit card can serve as a bridge to stabilize the available money for bills throughout the month. When doing this, make sure you are aware of how many days you can carry the balance without an interest charge.
2. Transfer Higher Interest Debt
Use your credit card to pay off existing debt from other lenders that are charging you a higher interest. A lower interest rate equals less money due over an extended period. Many cards offer special deals for new customers. Such cards may let you carry a balance for one to two years with no interest. If you pay off a large chunk of the debt during the introductory period, then you will save money that you would have otherwise paid in interest.
The most known benefit of credit cards is their rewards. Using a credit card tailored to your spending habits can pay off dividends. Cash back rewards can work to your advantage for saving money on everyday items such as groceries, clothing, and gas for the car. If you plan on taking a vacation soon you may consider a card with frequent flyer miles as a better option. There are also cards that carry discounts and deals on exclusive items for their members. There may be a card that rewards specific purchases you usually make, or purchases from a specific store.
4. Lower Rates
Using credit cards responsibly to increase your credit score will help you to acquire loans with lower interest rates. The higher your credit score, the lower your risk to lenders. When it comes to big loans such as mortgages and car loans, even a few points in interest can make the difference of thousands of dollars. Your interest rate also determines how much of a premium insurance companies will charge you.
5. Go Green
For homeowners, using a credit card to go green makes sense. Instead of waiting to purchase energy efficient appliances and home repairs, they can make the purchases they need now and start saving money on their utilities immediately.
6. Extended Warranties
You can save yourself from a big hit in loss and repair by taking advantage of extended warranties. Certain cards will automatically add an extended warranty in addition to the manufacturers warranty on items that are considered an investment. An extended warranty on necessary items will help you to replace or repair the item without paying for it yourself.
7. Price Protection
If your card has price protection, you are protected from paying full price on items that later go on sale. If the price is drastically reduced on an item that you bought only a day or two ago, the original charge can be reversed and the sale price will be applied instead.
I was compensated for this post and all views expressed are in line with my own