Credit cards are viewed as a complication by some people and they tend to avoid them. However the catch with credit cards is that, in addition to using them frequently, you must pay your bills on time.
According to experts, the purpose of having a credit card should not be restricted to the ability to purchase items on credit, but rather the process of establishing a solid credit history by paying bills on time. This gives the cardholder an advantage when it comes to financial items like loans.
A good credit score reflects a person’s capacity to make timely payments, boosting his or her creditworthiness. The cardholder can also earn reward points, which can be used for discounts, travel miles, and other benefits.
Today, there are a variety of credit cards to choose from, and picking the proper one is crucial. For a beginner, all credit cards may appear to be the same, but different credit cards are created for people with diverse incomes, requirements, and ambitions.
Experts advise that one should seek out those that are appropriate for their lifestyle and financial situation.
Be aware of the charges on your credit card: Know the interest rates, credit period, repayment time, and other terms of a credit card before using it. Credit cards become costly as a result of the different charges that accrue and pile up only when the balance is not paid in full.
Interest rate, annual fees, late fees, credit limit, foreign currency markup fee (travel abroad), and other expenses are all related with credit cards. To avoid credit card debt, experts advise learning about the various fees levied. As a result, it is critical to read the fine print.
Dealing with several credit card debts: If you find yourself in the unfortunate circumstance of having many credit card debts stacking up, experts advise that you pay off the card with the highest interest rate first.
Simultaneously, make minimum payments on the other cards until the one with the highest interest rate is paid off first. Keep in mind that, at the very least, on one card at a time, you should spend more money paying off the principal rather than the interest.
Experts suggest that if you want to be clear of credit card debt quickly, you should try to receive a debt-free loan from a family member or a friend. Alternatively, they can offer a loan with a reduced interest rate.
Transfer your debts: The due amount of a credit card can be transferred to a much lower interest rate with the help of a balance transfer. This service is provided by a number of banks, and it allows cardholders to transfer their debts from various cards onto a single transfer balance credit card. This lowers a cardholder’s interest rates while also assisting with debt repayment.