One of the first steps towards control of finances is, in short, the moment in which the first credit card is obtained. It is a financial tool that gives independence, comfort and opportunities. However, to take advantage of its benefits, it is important to manage it in a responsible and orderly manner.
“Although it is a powerful tool, misuse can have negative consequences, that is why we always emphasize the importance of reading the small print well, understanding how much the credit costs, identifying if it has maintenance costs or opening fees, etc… ”, underline the experts of the financial comparator HelpMyCash.com
There are some very important aspects that everyone who is starting at this stage should know, not only to improve their financial education but also to get the most out of the credit card.
1.The basics about credit cards
A credit card is a financial tool that allows you to borrow money to make purchases. The bank gives each customer a credit limit, which is the maximum amount the lender will allow you to spend with your card. If the balance is paid in full each month, initially, there will be no charges for using the card. But if an outstanding balance is carried from month to month, then the cardholder will have to pay interest.
2. Keep expenses under control
“Make sure you don't spend more than you can afford. A general rule of thumb to establish healthy financial health is to spend no more than 30 percent of your credit limit,” the experts at HelpMyCash.com recommend.
3.Pay on time
Not making a payment on time, even just once, can have serious consequences. If part of the balance is left the following month, interest will have to be paid on that accumulated balance and interest will also begin to accumulate for new purchases. So in the end the value of the purchase will turn out to be higher. However, there are credit cards that allow financing at 0% interest. This is the case of the WiZink click card, which, although its APR is 19.99%, offers its customers the possibility of financing purchases of between 85 and 1,000 euros over 3 months without commissions or interest (0% NIR, 0% APR). An excellent alternative to finance certain expenses or unforeseen events without the penalty of interest.
Another plastic that allows you to pay in installments without interest is the Visa Tú de Abanca credit card. This allows purchases to be paid at the end of the month without interest or commissions or in terms of 3, 6, 9, 10 or 12 months, without interest, but with commissions – between 1% and 4% depending on the term. In addition, if preferred, it will also be possible to finance purchases and return the money in fixed installments.
4. Frequently review credit card charges
Track credit card purchases. Most banks offer online banking services and mobile applications to allow their customers to have their movements and account statements at hand. “Today you can access transactions in real time and you no longer have to wait for a printed monthly statement to arrive. This allows the cardholder to review their consumption and know if they are making good use of it or not”, they highlight from the comparator.