How to use your credit cards responsibly

Use your credit cards responsibly!

Credit cards can be double-edged swords. They’re great tools in some cases, but if you misuse them, you can put your financial stability and your credit score at risk. So, read on and learn how to use your credit cards responsibly!

Credit cards offer a wide range of benefits to their users. Not only they allow you to pay for something without carrying cash, but they also offer rewards and cashback in some programs. In order to stay only with the perks and not falling on the downsides, you should make a responsible use of your credit cards. 

Learn how to use your credit cards responsibly

The golden rule of credit card use is to spend only as much as you’re able to pay off each month. This said, don't use your credit card limit as a guide. You need to add all your income sources in order to calculate how much you can spend, and stick to this budget. 

If you put more expenses on your cards than you can afford, you'll start to build a credit card debt. As you won't be able to pay off your credit card balance, it’ll pile up interest and additional fees for the service. Take into consideration that the annual percentage rate can be as high as 24%, or more! The interest accruing on your credit card balance will only add to your debt.

Paying off your debt can be a challenge. As penalties will continue to increase your credit card debt, you should prioritize this payment over any other. If you stay in red, your score will be seriously affected. This is one of the expenses that can affect your creditworthiness.

In order to avoid falling in debt, there are some expenses that you really should never put on a credit card.  For example, mortgage payments, business startup costs, or car purchases. Adding these expenses to your credit card balance may actually lead to you paying more in the long run unless you know that you can pay them off in the short term. 

If you're in trouble or you have to face an additional payment for an unexpected cost, you may need extra money. If you're wondering about using your credit card to borrow some money, take a thoughtful look at the pros and cons before making a decision.  

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