How To Be Financially Responsible With A Credit Card

Some people are very good with finances, budgeting and all of that good stuff. A number of people, however, often struggle to keep track of where their money’s going and how to budget it off. It is very common for young adults to sign up for a credit card once they are officially on their own for the first time (#adulting).

Although there are benefits to having a credit card, such as building credit with on time payments, earning rewards, and more, credit cards can still be extremely risky if not used wisely and maintained properly.

Here are some ways to be proactive with your credit card to help on your journey to become more financially responsible.

Pay your bill on time, every time

When you don’t pay your bill on time, you get charged with late fees. Also, in some cases a late payment can increase the minimum payment you have to make. When you make your payment on time, this also is a way to prove to creditors that you are reliable and responsible. It might seem easy to let it slide one time, but that can easily lead to a bad habit of making late payments.

Pay off what you can

With most cards there will be a “minimum payment” each month that is required to pay. It is recommended that if possible, pay a little bit more than the minimum each month, or pay of the entire balance if you are able.

Stay within your means

This one kind of goes without saying, but it’s one of the harder rules to follow. You don’t want to use your credit cards to buy something just because you can. Make sure that you really do have the money to buy it, and it won’t leave you with the payments you can’t make. When looking for a new card, maybe look for a low annual fee and interest rate.

Read your agreement thoroughly

Reading your cardholder agreement is something that absolutely needs to be done. This is the only way to be aware of the fees and finances charges that can come with having your card. A cardholder agreement can sometimes be confusing, so make sure to get in contact with the card’s customer service department to clarify any questions or concerns you  may have.

As long as it is used responsibly and within your means, a credit card can be beneficial. As always, do you research before making any commitments and get clarification when you don’t understand.

Make sure to tune into Bruce’s show next Tuesday for his next topic!

Sources:

1. https://handsonbanking.org/adults/using-credit-advantage/credit-cards/responsible-use-of-credit-cards/

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