If you have in mind that credit cards are the devil’s tools to make you spend money, it is important to know that you are wrong. Many people have grown up with that idea, because they saw their family or friends fall into infinite debt, but in most cases it is bad habits, incorrect information and even little discipline. But the truth of the matter is that plastics can help you in many ways. So, if you are thinking about acquiring your first credit card, don’t worry! The first thing you should do is choose it carefully and then start using it applying the techniques that we present below.
Believe it or not, when it comes to credit cards, you just need to have some key strategies to get them out of all the good stuff and that it doesn’t cost you a sun. Start taking note!
1. How to avoid paying membership
First of all, a cost that some ignore and that later ends up surprising them is the membership. Most credit cards include a payment that is made annually under the name of membership. The amount may vary depending on the card and the financial institution. But you won’t necessarily have to pay for it.
One of the conditions to exempt the payment of membership is that every month there is a consumption -in some cases, there is no minimum amount-, but that does not mean that month after month you must buy new things, clothes or use your card at go to eat.
Something you can do to exempt that payment is to affiliate a monthly payment that you make so that it is charged to your card: for example, your cell phone, the payment of your vehicle insurance, your cancer insurance, etc. As they are regular expenses that you normally pay in cash, you will not have the risk of getting into debt and thus eliminate the cost of membership. What yes or yes you should avoid is spending that money. Remember to separate it to make the payment.
2. How to earn monthly points
Another important point to keep in mind is that every time you use your card you should be earning points. Having the ideal card is essential to know that you are accumulating the points that interest you and that are ideal for your profile. If you are someone who enjoys traveling a lot, earning miles or gaining access to airport lounges will be much more useful than discounts at a supermarket. If you are one of those who enjoy nightlife, discounts in bars and clubs may be more interesting.
So, something you can do to continue accumulating points is to pay some purchases of the month that are fixed with your card. If you were planning to make the purchase in cash, it means that you can pay it with your card and cancel it later without that means more expense. The important thing here is that you do not resort to installment financing and that you only spend the amount you planned to spend.
3. How to avoid paying interest
The secret to avoiding paying interest is to pay it off in one lump sum. If you are going to use your card, you should be aware of being able to pay that amount the following month in a single installment, without resorting to financing. That way, you will only pay for what you spent, without any interest or surcharge. To achieve this, you need to be aware of how much you are spending. Check your bank’s application and you will be able to see the detail of the use of your credit line. With these data, you will be calculating what is the payment that you must make at the end of the month and you will not go over the line or spend more.
4. What to do in cases of large expenses
This does not mean that you cannot make large expenses with your card. If you want to buy something and you know that you will not be able to pay it all in full because it involves a large outlay, you can finance it in installments. Here you will pay interest, but the important thing is that you will cover the purchase within your budget, without running the risk of falling behind or not making the payment.
Definitely, it is recommended that you do not finance in more installments than necessary, between three to six, for larger expenses.
Your credit card should work for you and not the other way around. Every time you use it, it should give you an additional reward, and help you cover the costs, even if you don’t have the money at the moment. The important thing is to keep in mind the idea of being a total and cancel the total debt monthly to save on interest.