If you have in mind that credit cards are devil’s tools to make you spend and spend money, it is important that you know you are wrong. Many people have grown up with that idea, because they saw their relatives or friends fall into infinite debts, but in most cases it is bad habits, incorrect information and even little discipline.
But the truth of the matter is that plastics can help you in many ways. So, if you are thinking of acquiring your first credit card, calm down! The first thing you should do is choose it carefully and then start using it by applying the techniques presented below.
You just need to have some key strategies to get them all the good and it doesn’t cost you a sun. Start taking note!
How to avoid paying membership
In the first place, a cost that some ignore and then end up surprising them is membership. Most credit cards include a payment that is made annually under the name of membership. The amount may vary depending on the card and the financial institution. But you won’t necessarily have to pay for it.
One of the conditions to exonerate the payment of membership is that every month there is a consumption – in some cases, there is no minimum amount – but that does not mean that month after month you should buy new things, clothes or use your card at go to eat.
Something you can do to exonerate that payment is to affiliate a monthly payment you make so that your card is charged: for example, your cell phone, the payment of your vehicle insurance, your cancer insurance, etc. Being regular expenses that you normally pay in cash, you will have no risk of borrowing and thus eliminate the cost of membership. What you should avoid is spending that money. Remember to separate it to make the payment.
Another important point to keep in mind is that every time you use your card you should be earning points. Having the ideal card is essential to know that you are accumulating the points that interest you and that are ideal for your profile. If you are one of those who enjoy traveling a lot, accumulate miles or get access to VIP lounges at airports will be much more useful than discounts in a supermarket. If you are one of those who enjoy the nightlife, discounts in bars and clubs may be more interesting.
So, something you can do to continue accumulating points is to pay some purchases of the month that are fixed with your card. If you still thought about making the purchase in cash, it means that you can pay it with your card and cancel it later without that means a greater expense. The important thing here is that you do not resort to installment financing and that you only spend the amount you planned to spend.
How to avoid paying interest
The secret to avoid paying interest is to cancel everything in one installment. If you are going to use your card, you should be aware of being able to pay that amount the following month in a single installment, without resorting to financing. That way, you will only pay for what you spent, without any interest or surcharge. To achieve this, you need to be aware of how much you are spending. Check the application of your bank and you can see the detail of the use of your line of credit. With these data, you will calculate the payment you must make at the end of the month and you will not go over the line or spend more.
That does not mean you cannot make large expenses with your card. If you want to buy something and know that you will not be able to pay everything in full because it implies a large outlay, you can finance it in installments. Here you will pay an interest, but the important thing is that you will cover the purchase within your budget, without running the risk of being late or not making the payment.
Definitely, it is recommended that you do not finance in more installments than necessary, between three to six, for larger expenses.
Your credit card should work for you and not vice versa. Each time you use it, it should give you an additional reward, and help you cover the expenses, even if you don’t have the money at the moment. The important thing is to keep in mind the idea of being a totalero and cancel the total debt monthly to save on interest.