How to manage credit cards

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Credit cards

They give the power of tomorrow today, If managed well. But the usual problem is the user try to manage beyond his earning powers and fall in credit card traps.In tis blog I will discuss about how to manage such things.



Tip 1. Selecting the cards.

If you have any card which requires annual fee think twice about it.Now a days there are so many card providers who offer them for free.If it is for a fee , what privilage am I getting because of that? The point system and rewards are just baits to catch new prey. After the financial meltdown the rewards and points are becoming less rewarding for user.

Tip 2. Sign immediately on receipt of card.

This feature if not done you are leaving it open you are actually inviting everybody who see it to sign on it. The signature is an important safety feature to prevent frauds.


Tip 3.Once you selected your credit card keep a log

Yes , make it a habit to log in the expenses met with the card in a diary. It will help you to cross check the statement. It is important because sometime it may happen that you give one credit card to the merchant and he returned it to you telling, "Transaction not accepting give me another card" and you gave another card and done with the transaction. In most cases you will get charged for the failed transaction.

Tip 4. Use photo card

It will reduce your risk and puts the risk to merchant to verify the person. This will be useful if you have lost your credit card and want to prevent somebody else to pretend as you and use your credit card.


Tip 5. Use it only if it is required

If you have loose cash use it. If you have debit card use it. After this only try using credit card. By reducing your credit card usage you are not only reducing your risk , but also your extra expense.


Tip 6.Pay it full

Pay your staement due fully, do not allow the credit card balance to roll over to next month by paying a part payment now.

Tip 7.Do not wait for statement

Donot wait for the statement to come to you to pay. Have your own schedule say 5th to pay credit card dues ,irrespective of the fact you received or not received the statement.This will totally take out the risk of statement not reaching you away.

Some Credit card providers will start calculating the interest from the day you used for ATM transactions. In this case earlier you pay the better.

Tip 8. Use it only for purchasing and not as a substitute of bank

Credit card Money is not yours. It's only a facility to use your money in advance.Do not use value added services like taking cash out from ATM , getting a Demand Draft issued , Home delivery of tickets purchased etc. using credit card. All of these services comes with a price normally higher than what is available in the market.

Not only that cash withdrawal is an expensive use which attracts more charges, but also it disrupts your own cash flow. remember you are fooling your own cash flow by withdrawing money from ATM.

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