Habit #1: Confuse credit cards with other credit products
Credit card, cash loan and commodity credit are three different products for different purposes. The credit card is intended for regular payments. A cash loan is money on credit for any purpose. A commodity credit is a credit in a store for a specific product. Before making any purchase on credit, it is necessary to analyze which credit product will be most beneficial for this purpose.
Habit #2: Ignore Credit Card Loyalty Programs
In modern society, it makes no sense to use a credit card without special loyalty programs. Therefore, first of all, you need to analyze your payment preferences and choose a card with those privileges that you use most often, and, therefore, you will get the greatest benefit.
A credit card may have extra benefits: discounts at partner stores of a bank or payment system, cash back, accrual of miles for air travel.
Habit #3: Feel free to withdraw cash from credit cards
The legal service expert reminds that cards and loans are completely different products. A personal loan can be obtained by a borrower in the form of cash, while a credit card is intended only for non-cash payments, which limits the range of its use. Withdrawing cash from a credit card leads to an immediate exit from the grace period, which deprives the credit card of its main advantage.
According to financial specialists, cash withdrawals from a credit card are accompanied by a commission from 1% to 5%, depending on the bank.
Habit #4: Always forget about credit card grace period
The main advantage of a credit card for a borrower is the ability to use credit funds for a limited period for free, without paying interest.
Habit #5: Don’t read about other credit card terms
According to financial specialists, banks always flaunt only the positive aspects of their products.
There are pitfalls. The bank often announces that the card is launched for free. It is necessary to clarify what exactly is free – release, maintenance. Maybe there are terms under which the card becomes free – the presence of a bank loan or a deposit.
If the card just lies in yor pocket. And for some time you don’t use it, do not forget that there are commissions that will be written off, despite the absence of debt. Usually, this is a fee for an annual service, SMS-informing or Internet banking. It is most convenient to follow the operations of debiting from your card through the Internet bank, at least once a month looking at the statement. In the statement, the bank will always indicate the minimum payment, if any.
Of course, you need to pay attention to the commission for withdrawing cash, but you should not be guided by it, because withdrawing cashthrough credit card is not profitable in any case.