Responsible use of your credit card begins with understanding the credit card and how it works. A credit card has often been called ‘plastic money’ and this characterization is correct because credit cards are made of plastic and, secondly, they do represent money thereby giving you the ability to purchase.
Credit cards are issued by banks and other reputable issuers. The issuer extends credit to you and your credit card is your means of accessing the credit line.
How to get maximum benefits from credit cards
A credit card should give you flexibility and freedom of spending without costing you too much in fees and interests. To get maximum benefits from your credit card, follow the following tips:
- Understand your contract
Before you apply for a credit card, you have to make sure you read your application documents and contracts very carefully in order to understand what you are signing up for.
- Get a card that has partnerships with stores
The flexibility and spending enjoyment you will get out of your credit card will depend on the partnerships between the issuer of your credit card and business establishments.Get a credit card from an issuer who has collaborations or partnerships with retail stores and other business entities such as hotels, clubs and airlines.
- Understand the billing cycle
Credit card payments operate on a billing cycle. When you receive the bill, you are required to make a minimum payment within a period of time specified by the credit card issuer.The minimum amount represents a fraction of the total amount you have spent on your credit card.
If you have the financial ability to pay more than the minimum amount, it’s usually advisable as this will help you improve your credit record.
- Aim for lower interest and fees
Different credit card issuers have different interests and fee structures. If you would like to own a credit card that offers benefits such as zero interest rates and interest free shopping, you can sign up for a Gem visa card at www.gemvisa.co.nz
Avoid credit cards that charge high interest because this will inflate your monthly bills. At the end of the day, the lower the interest and fees you pay, the better it is for your personal finances.
- Customer service
Credit cards have a wide use including online transactions. It’s normal that you will come across situations when spending that will require help. As such, choose a credit card that offers helpful customers service that will readily come to your aid.
How to keep your finances safe when you have a credit card
Credit cards are supposed to be a good thing, but like anything else, using them in the wrong way could start affecting your finances. Your personal finances will be safe if you do the following:
- Make sure you make your payments on time every month.
- Look at your statements in detail every month, and if there are any charges that you dispute, call customer service. If your concerns are legitimate, they should get these charges reversed.
- Only spend an amount that you can comfortably pay from your monthly income.
- Avoid spending the whole credit card balance limit because this could make it difficult to repay.
- If you can pay the full outstanding balance, do so.
