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There is no denying on the fact that it’s always one of the most exciting feelings in the world when you have your first credit card in hand. It not just gives you the financial freedom, but provides you with unlimited advantages and features. However, if you are a first time user, there are certain points that you should always keep in mind. Yes, their unfettered usage can easily lead you towards the debt trap. Hence, one should always swipe his or her card carefully in order to stay away from any sort of fraud or trap.
So, here is a list of some important tips that beginners should always keep in mind before start using the credit card:
Stick to Your Budget
The convenience of having the credit card can actually sometimes lead you towards financial downfall as you may spend more than your budget. So, being a beginner or first-time credit card user, it would be advisable for you to set the monthly limit for your expenses. And, it should be just half of your actual credit card limit.
One of the best ways through which you can stick to your budget is by registering your mobile number with your account of credit card. So that everytime when you swipe your card, you will get an alert on your phone, telling you about your available balance and the amount you have spent.
Not to Increase your Credit Limit
When you get a credit card, the bank or lender offers you certain limit to use the card, according to your income. But, gradually, these banks try to lure you with plenty of amazing offers so that you can increase your credit limit. All you need to do is just ignore these lucrative deals and stick to your actual credit limit so as to avoid more expensive purchases.
Until and unless you won’t receive a substantial increment in your current salary, a low credit limit will actually work for you. Through this way, you can avoid the over-expenses and save your pocket.
Do Full Payment on Time
If you use a credit card, every month you will receive a statement, describing your monthly expenses on each day through credit card. Thus, once you receive the statement, you need to pay the amount back to the bank within certain period of time. So, always try to pay the entire amount in one time by the due date. Else, you will need to face the late payment charges.
Many banks lure you with great offers where in they encourage you to pay half of the amount now and carry forward the remaining balance in the next billing cycle. Always try to avoid these amazing and lucrative offers as banks without even keeping you aware apply many hidden costs while offering such services. So, it would be great, if you make the full payment of your credit right on time.
Maintain Your Card’s Security
Always remember not to share your credit card information with anybody. Your CVV number and pin are the most confidential source of information. So, keep this information confidential with you. Moreover, to keep your card more protected, never let anybody use your card in your behalf.
Once you swipe your card, make sure that it should be done properly. While on the other hand, if you iuse your card for online shopping, ensure that you use the trusted website only which does not allow you to store your card’s details. Follow all the security procedures such as OTP or 2-step verification process so as to keep your card secured and protected all the time.
Avoid Cash Advances
Try not to use your credit card to withdraw cash neither from a bank nor from an ATM. Whenever you withdraw the money from your credit card, it will considered as a cash advance, and you will have to pay that amount along with high rate of interest. However, no grace period will be provide by the bank for such transactions, till your repay that amount.
Not only this, a one-time transaction fee will also be charged on your credit card that you also need to pay. So, try to avoid using credit card for withdrawing the money, use for emergency situations.