Using Your Credit Card Responsibly

by : marsel

These days, credit cards are used in so many transactions around the world. Sometimes, these plastic payment options are more considered by many consumers, as compared to carrying around cash. At present, purchases or transactions made online via the World Wide Web require credit card payments, as these are faster as compared to cash payments or checks.

If you are a credit card owner, have you stopped to consider what kind of spender you are? To put it simply: Do you know how to use your credit card responsibly? Although credit cards are known to make payments fast and hassle-free, especially if you suddenly run out of cash, but these things can be a big problem when they are mismanaged.

First of all, having a credit card means that you allow yourself to acquire debts. These are debts to your credit card company, which you will need to pay a certain amount of every month. Just for additional information: the Federal Reserve Bank reported that as of the year 2007, credit card debts from across America has accumulated to more than $900 billion. On the average, an American shopper has at least four different credit cards in his wallet.

If you want to be a responsible credit card user, then you can begin by settling down with only one card. Having more than one credit card doesn't guarantee that you have a higher credit limit, and it doesn't promise that you can spend more. This simply creates room for you to acquire more debt, and worry about interest rates later on. Credit card companies have different interest rates, so you should be wary of these and how they can affect your balance if you fail to pay on time.

Next, you should always remember to pay your bills on time. A majority of American credit card holders today pay their bills religiously, without going past the due date. If you can pay the full amount in a month, then do so. If you are to leave an outstanding balance, make sure you can try to spend less in the following month so you can take care of it. Some credit cards will impose interest rates on your outstanding balance, and the longer you put off paying for it, your balance might soon balloon out of proportion.

If you need to use your credit card when shopping, be alert with the amount you have already spent. Maxing out a credit card is never a good thing. You may seem to enjoy your new purchases this month, but you might faint when you receive your next month's credit card statement. Some people recommend that you only bring out your credit card unless it's necessary. Keep a reasonable amount of cash with you. If you can still pay in cash, do so.

Also, in case of credit card theft or loss, be sure you report this event to your card company right away. Any further purchases made on a reported card will not be honored. This protects your identity as well as your money.