I have been a credit card holder for 3 years now. In those 3 years, I have certainly learned a lot. Some of these I learned the hard way. A big outstanding balance was my punishment. The following are some of them:
1. Know the important dates in your credit card.
These are the cut-off date, statement date, due date and card expiration date. These crucial dates can be seen in your credit card statement. Before purchasing, I advise you to pause for a moment and think if what you are about to purchase is within the cut-off date or not, when would it fall due and if you think you have enough funds to pay for it by the time due date comes . As to the expiration date, some stores refuse to accept your card if your car is about to expire and you want to apply deferred payment.
2. Pay the full outstanding balance on your statement.
Avoid paying interest or the so-called finance charge on your credit purchases by paying the full outstanding balance on your statement, and not just the minimum payment required by the due date. Remember that interest-free periods do not apply except if you pay off in full. If you fail to do this, you will be charged interest on your outstanding balance and therefore forfeiting the interest-free period on your past purchases. Moreover, you must pay the balance off in full before you will get any interest-free period on your current and future purchases.
3. Credit cards have annual fees.
Some banks offer to waive the annual fee on your first year or if you spend enough on your card each year, or if you are a valued client of the bank. Thus, unless you are sure that your card is exempt from annual fees, then this must be taken into consideration because annual fees can be a big amount, depending on what type of card you have. Further, this is also one good reason why carrying more than one credit card is not advisable.
4. Do not be fooled by the offer on cash advances on your card.
The interest rates on credit card accounts do not apply to cash advances. Aside from the interest rates, some cards also impose a service charge whenever you apply the cash advance feature on your card.
5. Remember that incidents of internet banking fraud are rising.
Be wary when using your card in the internet. Deal only with established and reputable merchants and be careful when sending out your credit card details.
These are only some of the things that must be kept in mind when you have a credit card. Credit cards can indeed be very convenient and can make our lives easier. However, we must also be responsible and not unmindful of the risks associated with having them.
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