Credit cards are one of the favorite payment tools for some people. Because, many facilities are obtained from the use of credit cards. For example discounts and low installment facilities.
But despite having a myriad of facilities, credit cards must be used wisely. The problem is that we can fall into a deep debt gap. Even more fatal, we can experience total bankruptcy so that the family’s financial condition is in disarray.
Therefore, we must ensure that we understand the formula of using the right credit card before applying for a credit card. The following do’s and dont’s are recommended when using a credit card:
Set the budget
The monthly budget must be available so we have a benchmark for securing finance. For example income of USD 10 million. Set aside USD 4 million to save. The remaining USD 6 million can be used for shopping, including by using a credit card.
Shopping with a credit card is also mandatory. In this case the bank has helped by setting limits. But you should also set your own limit below the limit of the bank, so it is more disciplined in using credit cards for shopping.
Understand the terms and conditions
Usually in the morning, read the newspaper, now, change the document to read the terms and conditions to understand. This is what usually goes unnoticed. The terms and conditions must be read and understood carefully so that there will be no misunderstanding in the future. Many cases in the field of credit card owners are making a lot of fuss about writing letters to readers in the mass media because they feel burdened by “stealth fees” on the interest on their bills. Though the interest calculation was in accordance with the provisions set by the bank.
In addition, make sure we know the amount of additional costs we have to pay, such as late fees, cash withdrawal fees, and other costs. That way, we can think twice before using a credit card for puUSDoses that incur additional costs.
As much as possible pay in full
Although there is an option to pay the minimum bill of 10 percent of the total bill, try to pay the full bill every month. This is useful to keep cash flow or cash in and out of your account smoothly.
The minimum payment causes a bigger bill the following month. The thing is there is interest if it’s calculated quite large as well.
It will be more dangerous to pay a minimum amount each month. That means we are digging our own grave. In time we will be buried by debts that continue to accumulate.
People say many bills have lots of luck … he said, you know. Many credit card users simply pay bills when they get a bank statement. Though they should have checked the bill first. Who knows, there are transaction fees that we did not do but were charged to our bills.
By being conscientious, we at the same time ensure that we do not become victims of misuse of credit cards by others, especially internal bank parties. If there are irregularities in the bill, immediately contact the bank on the same day to make a complaint.
Leaving outstanding balance not paid
Outstanding balance appears when we do not pay the bills in one month. In the following month, a certain amount of outstanding balance will appear. If in that month we again do not pay in full, this debt will swell in the next month. If we really can’t pay in full this month, try to pay it off the following month. Because the outstanding balance of interest can grow quickly beyond the credit card limit if left unpaid for a long time.
Transactions approaching credit card limits
The general formula for keeping a credit card healthy is to use a maximum of 70 percent of the limit. For example, a credit card limit of USD 10 million. Try every month a maximum transaction of USD 7 million with that credit card.
Many credit cards are the same as having many wives, to be fair if you do not want to be complicated. It would be better if it did not reach USD 7 million. This is useful to prevent over limit.
If we for example have used USD 9 million before the bill date and suddenly there was an urgent need that required the use of a credit card of USD 2 million, meaning that we had to violate credit card limits. That’s why we should not deal near the limit.
Shame to consult financial difficulties
If financial conditions are not good so it is difficult to pay bills, no need to be ashamed to visit the credit card issuing bank to consult. The bank can help arrange bill payment plans through negotiations. If finances are going bad, we can find a financial planner to ask for a solution. In essence, if there is a financial problem that makes the bill unpaid, there’s no need to be ashamed to tell about the difficulties. Don’t even underestimate it and cover it up.
If you can pay debt using a promise, guaranteed Indonesia will be rich. That’s the formula for using a credit card wisely and precisely. It’s not complicated if we want to be a little more thorough and disciplined. Credit cards are like kitchen knives. If we know how to use it, food dishes will look delicious. But if not, our fingers can be cut and bleeding.