How to Manage Credit Cards Responsibly

 

Credit cards are helpful financial solutions to pay for the things you need, even without having cash on hand.

But while credit cards can support your expenses, they can also lead you to financial trouble the moment you lose track of your expenses and go more than your limit.

As a responsible credit card holder, you need to know the proper steps to manage multiple credit cards and stay on top of your spending.

 

What Is Credit Card Management?

Credit card management allows you to track all your credit card activities. It includes overseeing your current balance, debts, interest rates, penalties, and rewards.

With this practice, you receive updates and information on any changes or adjustments that reflect on your monthly statement of account.  

Why Credit Card Management Is Important?

While banks and lenders manage your credit card transactions, it pays to practice diligence in using your cards by applying credit card management practices.

Whether you use your card for a grocery purchase or swipe it to buy a new car, it is essential to be critical of your account. It can lead to a financial dilemma which may negatively impact your credit score.

Poorly managed credit card accounts result in lower chances of getting approved by other credit card companies and loan applications should you decide to get one in the future.

Improves your credit score 

If you manage your credit card well, you never miss a payment and don’t leave your card max out. This good practice reflects well on your credit score and helps improve it over time. 

Helps you avoid late payment fees

Staying on top of your credit card deadlines saves you from hefty penalties from banks and lenders. 

Helps you control your finances better

With credit card management, you oversee your financial status by allotting enough cash to pay for your debt on time while restricting yourself from spending more than you can pay. 

Helps prevent you from making impulsive purchases

The best way to use credit card is when you are spending for your short-term needs. Moreover, it is not advisable to pay everything with credit card.

When you manage your cards well, you will know the consequences of abruptly buying random and insignificant things. 

Helps you set aside money for your expenses and save money

With proper credit card use, you can save cash to support your expenses instead of using your card with interest rates that can cost you more. 

How to Manage a Credit Card Responsibly

Again, the key to managing your credit card is to stay responsible for your expenses.

This includes being ahead of your monthly payment deadlines, maximizing your card’s benefit, and choosing alternative spending methods.

Pay your bill on time.

The first step you have to make in managing your credit card properly is never to miss a payment deadline.

Paying on time saves you from substantial interest rates and penalties and helps you maintain a good credit score. Additionally, missing payments poses a risk of credit limit reductions which you wouldn’t want to happen. 

Pay your balance in full each month.

Credit card companies allow you to pay at least the minimum payment—but you can eliminate your monthly balance by paying in full to reduce the chances of your debt piling up month after month.

If you keep paying just the minimum, you may realize that you have spent more interest than the original debt you owed. 

Don’t spend money you don’t have.

Does using credit card good? Yes, credit card use is vital for your needs—paying off your monthly bills, purchasing home supplies, or buying an appliance.

But when impulse buying kicks in, it will only lead you to trouble, especially if you can’t pay it back on time.

Consider a credit card as a temporary loan you need to pay off in a short period. Prolonging payment of your balance will increase your debt. 

Don’t use your card as an ATM.

Withdrawing cash from your credit card has a higher interest rate than using the card itself for your purchases.

With credit card transactions, you can avail of an interest-free period; however, you’ll get immediately charged with a cash withdrawal.

Keep your credit limit low to avoid temptation.

Set a strict spending limit that fits well with your finances. This means you have to keep your credit limit low to prevent buying on a whim, which can ruin your capacity to pay on time. 

Avoid high-interest rates.

Before swiping your card for a specific purchase, double-check if it comes with high-interest rates. Reconsider your decision to buy it through a credit card if the rates exceed what you can afford. 

Set a budget and stick to it.

When purchasing through your card, keep a budget in mind for every specific purpose, such as a monthly grocery bill, a travel expense, or a new set of kitchen supplies.

While you may have a higher credit limit that can afford the purchase, setting up a budget prevents you from spending too much. 

Check your credit report often. 

It wouldn’t hurt if you take a peek at your credit report now and then. This lets you stay on top of your credit standing and find solutions quickly if you discover a negative hit in your credit score.

Check with your credit card issuer if they provide credit monitoring services. 

Store cards safely.

Safekeeping cards is an often overlooked tip in managing your credit cards. Putting it where you do not see it constantly can keep your spending to a minimum.

Meanwhile, keep it stored away from preying eyes of pickpockets when you are using it outside.

 

Tips for managing multiple credit cards

Here are simple tips on how to use a credit card and how to avoid high-interest rates and penalties. 

Keep track of due dates

The best way to manage credit card payments is through tracking. You should know the terms and conditions of every credit card you own and their corresponding interest rates, balances, limits, and charges. By tracking your bill’s due dates, you will be able to prepare your payment ahead of time. 

Consider switching to all-in-one payments

If you have difficulty paying off credit card debts with varying interest rates, consider debt consolidation, which allows all-in-one loan payments.

This strategy will enable you to combine all existing debts and develop a monthly payment scheme with a lower interest rate. 

Debt consolidation is a way for some who cannot manage their growing debt and would like a way out of it in the most convenient and fastest way. Call us to learn more about our debt consolidation plan, and apply for one today!

Read the fine print, and know your rights as a consumer.

Fine prints can get overwhelming to read, especially with all those technical terms you must digest.

But if you make an extra effort to read it and understand what it says, you are more empowered to use your card, knowing that you are familiar with how it works.

You can also spot discrepancies or inconsistencies in your account statement if you understand your rights as a consumer. 

Pay off your highest-interest cards first, but don’t neglect the others.

Multiple credit cards mean who have to make payments that vary in interest rates. Prioritize the balance with the highest interest rates to slow down the increase of your debt.

This method, referred to as debt avalanche, does not mean you have to set aside your other dues. You can move the deadlines of your other credit cards and put them in dates when you’ll have incoming money ready for payment. 

Make it easy to check your credit card balance.

Do not wait until your following account statement arrives to check your credit card activities. There are many ways to check your credit card charges in real-time. You can choose your bank’s app, access their website, or get notifications via email. If you see some inconsistencies in your transactions, don’t wait to call your credit card issuer or lender for clarification. The faster you inform your lender, the sooner the chance that they can find out and fix what causes the issue.

Keep a list of your credit cards, with account numbers. 

Multiple credit cards can get confusing, primarily if you use them simultaneously for your transactions. It will be pretty challenging to track what you spent and what card you used for the specific transaction. As a solution, gather all your credit card details in one file for easy reference. If you ask what to put on a credit card tracking file, you can name them according to their purposes, such as monthly bills, travel expenses, etc. 

Only open new credit cards when you have time to devote to them.

Once you already get a credit card and have been a good payer, expect that there will be multiple credit card offers from the same bank or even from others. Try to refuse opening new credit cards, especially if you do not need them because it will only add up to the items you need to manage. Additionally, the yearly membership costs for credit cards are another financial burden added to your expenses.

 

Pay off your multiple credit card bills!

If you are struggling to pay off your multiple bills and your debt keeps getting heavier to carry on your own, you need a financial partner to give you advice on credit card loans.

Smarter Capital Group is a trusted debt consolidation partner that can help you get out of your debt and move forward anew. Our debt consolidation plan lets you gather all your debts in one account and eliminate them without dealing with late payments and hefty fees.

Talk to us to learn more about our services, and start your journey out of credit card debt today!