Even if you have never borrowed money, you must have a credit card. Whether you are one card or multiple cards, managing them is not as easy as falling off a log. Many people use credit cards irresponsibly so that they max out their credit card balance.
They are very convenient to use, so you do not bother to keep cash with you. You do not realise the amount of the transaction, and when the bill is generated, you eventually run out of money. As a result, your credit card debt starts mounting up.
To get rid of high-interest payments, you take out bad credit loans with an instant decision in Ireland, which results in taking on more and more debt. Credit cards are expensive, and therefore it is intrinsic to use them sagaciously. Interest is levied when you fall behind the due date.
If you clear the balance before the due date expires, you can save yourself from interest payments. Before you know the tips for credit card management, you should first know the types of credit cards, such as balance money transfers, travel cards, purchase cards, and credit builder cards. You will likely see how these credit cards work.
Standard Purchase Card vs Installment Credit Card
Most of the credit cards have different functions and features, so you will not be confused when choosing the one. Problems arise when you select a purchase credit card.
A standard purchase credit card allows you to make a purchase and pay off the whole of the balance within the grace period when the bill is generated.
It means you have to clear the whole of the balance at once. It is likely that when the bill is generated, you don’t have enough money to clear the dues. Once you miss the due date, interest will accrue every day.
However, some credit cards come with an installment plan. These cards will let you spread the cost over a period of months that can be up to three, six or 12. No interest will be charged throughout the payment term. However, you will likely pay monthly fees.
The best thing is you can choose the monthly repayments as per your budget, so you do not have difficulty clearing your dues. If you use a credit card to make a big transaction, you should use the one with an installment plan.
Tips for Managing Credit Cards
There are various types of credit cards, and you will have to meet the eligibility criteria. It is not feasible for everyone to get approval for these cards. Here are the tips to follow to learn credit card management:
- Pay by the Due Date
The first thing you must follow is the timely payment of your credit card balance. When a bill is generated, you will be given an interest-free period that could be a week or two weeks. You are supposed to clear the balance within this period, known as a grace period.
- If you miss the due date, not only will you pay late payment fees but also interest penalties.
- If you have been using a credit card installment plan, you are still supposed to make the payment on the due date. Otherwise, you will end up paying late payment fees and interest penalties for missed installments.
However, some credit card issuers can waive the late payment fees if this is the first time you have been very loyal to your payments so far. There are some people who make minimum balance because of other debt obligations.
Note that this cannot keep you from attracting interest penalties on unpaid balances. Soon you will see the balance rising up. A rule of thumb says that you should immediately settle the whole balance of your credit card every month.
- Learn Terms and Conditions
At the time of applying for a credit card, you must know the purpose of it. However, most of the time, people know all terms and conditions and regret it in the end.
When you receive your credit card, you will also get documents describing all terms and conditions. It is necessary to go through them in one go, but you must take a look at them. This will help you understand:
- How it will benefit you when you make all payments on time
- What happens when you make default
- What if when you make a minimum payment
- Your credit limit, APR, a grace period, and the like
Before using a credit card, you must know what your obligations are and how you will meet them.
- Monitor your Credit Card Activities
Even though you are able to manage credit card payments, you should constantly monitor your activities. You must know how much balance you currently have and how much you are to pay, and when.
- Look over the transactions you have made with your credit card.
- See if it makes sense to use it that way.
- If you find something incorrect, you should talk to your credit card issuer and get the problems fixed.
- You should keep checking your balance every time even though the statement says no payment is due because an outstanding balance can incur a lot of interest, so be vigilant.
You can use an app like Mint if you cannot do it manually. The app will let you track each expense. This way, you will get to know where you have used your credit card and how much balance it has.
- Use the Card when Urgent
You should use a credit card when there is an emergency. It is always suggested to avoid using it for regular expenses. If you rely on these cards instead of cash to make purchases, you will likely find you have maxed out your credit card and are now struggling to pay off the whole balance.
In the interim, if any emergency pops up, you will not be able to qualify for quick loans in Ireland with no guarantor at lower interest rates because of the high credit utilisation ratio. It is vital to note that you need to manage any kind of debt responsibly; otherwise, it will lead to racking up the debt.
Experts suggest that you should use cash for the majority of your transactions. You should use it when there is an emergency, provided you pay off the balance on the due date.
The Bottom Line
Credit card management is not very easy, especially if you are handling multiple types of credit cards. They can be expensive, so try to use them only in case of emergency. Understand what type of credit cards you have been using and know how it works and if it is suitable for your purpose. Credit cards are generally revolting credit, so be careful about paying off the entire outstanding balance. Keep tabs on your transactions and your account balance to ensure no outstanding balance shows up on your credit card. If there is an error, talk to the provider and have all your doubts cleared. Learn more
