How To Manage Your Credit Card In 5 Steps

 There are people that are afraid to have any credit cards because of the problems that could come up. It is not necessary to fear credit cards. They are often necessary for online purchases, car rentals and hotel bookings.

Use credit for travel and emergencies
Credit cards are best for travel or that night you get to a restaurant for a date and your wallet with cash is back at home. Cards offer travel protection against theft and are much safer than carrying cash.

Pay more than the minimum amount due
When you pay the full amount due each month, no interest charge is added to your account. If you make just the minimum payment, interest payments will be added to your unpaid balance. Over time, your unpaid balance will grow as interest charges are added on top of the original amount you charged. You will then be paying interest on your interest charges.

Create a budget and live by it
Technically this should be the first step, but it may not be possible to create a budget until you've settled your accounts and counted what's left over, if anything. This may be the time to ask yourself the tough questions such as what it is about your lifestyle that allows debt to happen in the first place. Is your apartment or house more expensive than your income allows? Are you a shopaholic? Are you having too much fun? And so on. If any of these factors is precipitating debt, consider taking aggressive steps before trouble starts again.

Understand the terms
Make sure to completely understand your credit card terms before signing up with one. Make sure you fully understand things like the interest rate, the late payment fees and any annual charges the card carries.

Close the deal
Credit cards have some great advantages. A credit card in your wallet can replace huge wads of cash. A credit card offers you an easy way to track expenses, as your monthly credit card statement itemises each purchase. And if you want to buy something now but don't have the cash for it, whipping out your credit card secures the deal.

source:blog.standardbank.com