If we use them well and know how to use them, credit cards can be a great payment method to help manage family consumption. However, a bad use of plastic on credit can drag us to a debt without exit. In our country, credit card financing is not as deep-rooted as in the United States or some Latin American countries, since we often take advantage of its debit method. But the truth is that in Spain there are almost 50 million credit cards , a fact that more than justifies the need to know how plastic financing works. In the following article, the financial comparator, HelpMyCash.com, offers us 5 tips to make responsible use of our credit card.
1. Know and understand the conditions
The first thing we must be clear before hiring a credit card is that we know the characteristics of plastic. Therefore, it is essential to read the fine print with the conditions and understand each point. But we must do this before hiring the card before you start buying. Some of the conditions to which we have to pay attention are:
- The APR of the credit card.
- The modalities of deferment of the debt , the amount of the installments and their periodicity.
- Associated commissions , by transfer of capital to the current account, for early amortization, for maintenance and issuance, for withdrawal of cash in ATMs of the entity or other banks, for currency exchange, etc.
- The credit limit of plastic.
2. Not having too many credit cards
Although having several credit cards may seem an advantage, because it increases our chances of having a higher level of credit, it is really a mistake. Using several cards at the same time can become a disadvantage easily , since the options of increasing the level of consumption are enhanced, while at the same time it can make us lose control of our expenses.
3. Check the balance periodically
Staying aware of the existing balance in our credit card, payments and collection of commissions is very important. In this way the accounts will always square and we will be aware of the expense that we can continue to face , or against if we should stop spending. Controlling our spending avoids that we overdeliver, but also helps us to be aware of the charges that the entity has made for maintenance and commissions, in addition to checking if they conform to what was agreed in the contract.
4. Do not abuse the deferment in payments
Credit cards allow us to postpone the payment of our purchases through different modalities. The most profitable option is the postponement to month expired in a single quota; consists of paying for purchases on the first day of the following month in a single payment without interest, so it does not generate extra costs. However, the deferral of purchases in several installments will imply the payment of interest, so that the longer we extend the term of the financing, the more interest we will end up taking on.
Paying with credit can be dangerous if we do not have control of our debts and if we do not recognize the spending limit that we can face. Extending deadlines and increasing expenses can generate a false sense that we always have money, but in reality what we are doing is swelling our debt.
5. Compare several cards
Before hiring a plastic option, we must consult the conditions of the cards of our entity , but also those of other banks. In this way we can find the option that best suits our financial profile and our current consumption needs. Among the sections to buy we have to look at the interest, the commissions, the free insurance they include, as well as the discounts or gifts they give. Here is a table with some of the best credit cards of the moment.
|Visa EVO Finance card||21.00% APR||
|WiZink Gold credit card||27.24% APR||
|Gold Visa of ING Direct||15% APR||