A credit card isnt just a convenience, its a tool that allows you to borrow money and build a credit score. Using a credit card in a bad way can get you into financial trouble and lower your credit card score. This article outlines 4 things you should never do with a credit card.
1. Lend it to someone
Whether its your best friend or your mom who asks to borrow your credit card, dont do it. For someone to need to borrow someone elses credit card means that they either cannot get a credit card of their own, have maxed out their credit card, or dont have the cash to pay for whatever they want. These are all signs that you should not hand over your credit card. You might feel bad about it, but you need to think about your money and your credit first. If you want to help them out, it would be better to lend them cash.
2. Pay less than the full amount
If you cannot pay your credit card bill in full every month, you are spending too much. Paying less than the full amount will result in interest fees and a worse credit score. Remember that using a credit card means that you are borrowing money. You do have to pay that money back. If youve been overspending, stop using your credit card so often and use cash instead. Pay off your bill as soon as possible.
3. Lose track of spending
When you use a credit card its your responsibility to keep track of how much youre spending. If you have hit your personal spending limit for the month, put the card away for a while. Some people get into the habit of using their card to buy absolutely everything from the large purchases to the $5 daily coffee. These things add up and if you dont hold on to your receipts and add things up every day, you can quickly spiral out of control. Hold on to your receipts and add them up so you know exactly how much will be on your card when it comes in. Once your credit card bill comes in double check the charges and then you can toss those receipts. Do this every month and youll find yourself taking more control of your spending.
4. Dont use your credit card to get rewards
Rewards are simply a bonus to using a credit card as you normally would. If you are eager to rack up points or cash back and use your card more than normal, youre really paying for your reward. Yes, it will probably take time to get enough points for anything, but thats not why you have the credit card. Dont pay so much attention to the rewards and youll be fine.
A credit card is a yours and yours alone. Its not something you have to lend anyone. Its yours to protect and use well. Follow the above 4 rules and you will be successful with your credit card usage.
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