As we move closer and closer to a cashless society, it's second nature to throw down a credit card, charge small items on your phone, and subscribe to all kinds of services and products. It's become so easy to spend. The result is that credit card spending can quickly go spiraling out of control.
Here are a few best practice tips that make managing credit easy and doable.
Know your interest rate
It is common
practice for credit card companies to offer low temporary "teaser"
interest rates. Many people go for the low initial rate and are not aware that
this rate can quickly increase leaving you with high interest rate debt that is
hard to pay off.
Maintain a low credit balance
There are many
positives to keeping a low balance, one of which is that it improves your
credit score, which is helpful when making large purchases such as homes.
Another reason to keep your credit balance low is that financial institutions,
such as banks, use it to determine your rate of interest. The lower your
balance, the better.
Pay your bills on time
This is a profitable habit to practice as you avoid losing money to late fees and extra interest charges on your balance. Paying on time also helps to build a positive credit history.
Everyday expenses such as coffee, subscription services, and ride hailing services can add up when paid for by credit. Using cash or a debit card to purchase these items is an easy way to keep your credit use low.
Pay Off Your Cards
Because all credit
cards carry an interest rate, paying your balance every month keeps your money
where it belongs, in your bank account. This is another way to improve your