5 SMARTER WAYS TO USE CREDIT CARD
Using a credit card is smarter than paying with a debit card. The golden rule, is to only pay only what you can afford to pay back in full at the end of the credit cycle. Remember, never spend more than what you earn. That twenty-thousand-dollar credit that you received from your credit card provider is your maximum limit, and in most cases, you won’t be able to pay that in full at the end of the month. The money that you earn, or can afford to repay without accruing interest, is your spending limit.
Never get into the trap of paying minimum fees and interest. Even if you happen to overspend, make sure that you pay it all back in full as soon as possible. This sounds a bit like grandmotherly advice – but sometimes, there is no better way to get across the basic common sense that most of us tend to ignore. If you agree to this big a commitment, then you are ready for these five reasons why managing expenses with a credit card will help you come out on top.
# 1 HANG ON TO YOUR FUNDS
When you pay with your debit card, your money is gone straight away. When you pay with credit card, the money is still in your bank account. That means you don’t have to watch your bank account so closely. And you don’t have to worry about losing your monthly interest since you’re not taking money out of your savings account. Always try to have a savings account that earns high interest.
# 2 LESS CASH ON HAND
We’re quickly becoming a cashless society, and to facilitate this shift, apps like youchamp offer credit card payment facilities to pay your friends. Using your credit card to pay friends and family back is faster and more convenient. And has the added bonus of security! You can quickly cancel a credit card if it gets stolen and most credit cards come with insurance including travel insurance. So if you tend to travel a lot for work or leisure, next time check if your credit card offers travel insurance. That way, if you bought your tickets using a credit card you won’t have the hassle of buying additional travel insurance. You can’t retrieve lost cash, unless you’re lucky enough to find it again! But credit cards can be quickly cancelled with a simple phone call.
#3 SAFER ONLINE SHOPPING
Likewise, credit cards make online shopping much safer. They come with extra layers of fraud protection and security, so there’s little risk of losing money when you shop online. And if you’re using a website you trust, credit card payments are a great way to add ease and save time. As a general rule of the thumb before using credit cards online make sure that the website starts with https:\\ in the browser – do not proceed using credit cards if websites do not have a valid SSL Certificate. If you are regular shopper on a particular website, try and see if they have a mobile app instead. Most of the e-commerce apps are security protected.
#4 BUILD YOUR CREDIT HISTORY
Having a credit card will help you build a great credit history – well, provided you pay off your balance on time every month. A good credit history will make it easier for you to apply for home loans and car loans the in future. Apps like youchamp will help you practice good repayment habits so you can be on your way to building a positive credit score!
#5 CREDIT CARD BONUSES
Many credit cards come with bonuses and offer reward points. These rewards points, when accumulated, could be a good place to get those fancy household appliances. There are perks such as Frequent Flyer points, low or nonexistent fees, promotional rates and bonus points. Usually there are minimum requirements you’ll need to meet first, but the bonuses are certainly worth using a credit card for expenses which you would be paying anyway. Credit cards are the best form of keeping a tab on all expenses, some of which might even be tax deductible, which could come in handy at the time of finalising your tax returns.
As long as you use your credit card responsibly, there are many reasons why you should start using one instead of paying with a debit card or cash. They offer rewards, security and convenience. There’s really no reason not to get on youchamp and start repaying or collecting money from your friends just with your credit card!