12 Credit Card Tips

12 Tips to Use a Credit Card but Not End Up in Debt | Pay Off Credit Card - Repayment Plan

Have you just received your first credit card? Are you rebuilding your credit after completing a repayment plan? Maybe you have more credit cards than your wallet can hold?

Learning how to use credit cards wisely, as part of an overall budget, will help you not end up in debt.  

Tip #1 - Shop With a Plan

Save up for purchases in your savings account first and don’t “just go shopping” with your credit card. If you don’t have it with you, you won’t be tempted to impulse spend. Use the credit card to make planned purchases and then pay them off as soon as the bill arrives. You’ll have the money saved, so it’ll be easy to do!

Tip #2 - Budget & Pay Ahead

Once you know what you spend each month on an anticipated expense, pay that set amount to your credit card when you get your pay cheque. For example, you know that you spend about $200 each month on dinners out. Pay $100 from each pay cheque to your credit card so that you don’t spend the money on something else in error. This helps you to follow through with your budget, build a favourable credit rating and only have a very small bill to pay (or none at all) if you stick with your plan. This only works well, however, if you pay your card in full every month.

Tip #3 - Use It for Only One Type of Purchase

You could use the card for only one type of purchase – and that’s it, e.g. gas. Choose a type of purchase that has an automatic limit to your spending.

Tip #4 - Keep Your Limit Low

Request a low credit limit and call the credit card company to lower the limit if in the past they have raised it without your request. You do not need high credit limits and numerous credit cards to build a positive credit rating.

Tip #5 - Ask Someone to Help You Stay on Track

Be accountable to a family member or close friend for your credit card use. Show them the bill each month and ask them to help you stick with your plan of paying the card off in full each and every month.

Tip #6 - Pay In Full or Put It Away

If you can’t pay the card in full for one month, put it away until it’s paid off. If you have to, damage the card so that you can’t use it. When you’re ready to use it again, call and ask for a replacement card. However, don’t try this more than once – the credit card company will wonder if you’re up to no good!

Tip #7 - Double Up on Payments

If you can’t pay the balance in full every month, pay at least double the minimum required payment each month. Then also stop using the card and you’ll see your balance disappearing.

Tip #8 - One Card Will Do It

Only have one credit card - period. It not only makes it easier to keep track of how much you've spent, it's also easier to decline credit card offers when you’re approached in malls or stores.

Tip #9 - Don't Rob Peter to Pay Paul

Don’t use another form of credit to pay for your credit card debt. Get help with your debts if you’re not able to pay your credit card off within a few months or if you find that you’re relying on it to pay for regular living costs.

Tip #10 - Know the Terms & Conditions

Be aware of the terms and conditions of your card as well as how reward programs work. It can be easy to collect points but it may have been less expensive to purchase the item outright, especially if you end up paying interest on your purchases.

Tip #11 - Don't Carry the Credit Card With You

If you want to use the credit card to help build your credit rating and you’re worried that you’ll overspend, don’t use the card for retail purchases. Instead, set up one pre‐authorized charge that will go through for a set amount each month, e.g. a newspaper subscription or gym membership, and then lock the card up. You’ll still build a positive credit rating because the account is being used, you know that it fits your budget because you’ve planned for that expense, but you won’t be tempted to overspend.

Tip #12 - Reward Yourself

Find inexpensive ways to reward yourself for managing your credit card wisely. It can be tough to stick with your plan, but staying out of debt allows you to reach your goals and that’s something to be really proud of!

Have you got any other tips to share that might help someone? Share them below!

Submitted by Rachel on Wed, 12/10/2014 - 17:12

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Freeze your card in a block of ice... taking the time to defrost it alows a self-imposed cooling-off period, to decide if you really need the purchase... I read this one years ago somewhere... so can't take credit