What you should know about credit card use? | Despite credit cards being the most convenient mode of payment while shopping or even paying for bills, there are a couple of things you should know about the use of credit cards. Most people have become fond of using credit cards not only because they’re convenient but also because they are safe as compared to cash. However....
What you should know about credit card use?written by: Patrickthewriter
Despite credit cards being the most convenient mode of payment while shopping or even paying for bills, there are a couple of things you should know about the use of credit cards. Most people have become fond of using credit cards not only because they’re convenient but also because they are safe as compared to cash. However, when using these cards you should always be aware of the fact that you should not only focus at the pros of using the card. It is also important to consider the cons of using credit cards for shopping or for other transactions thereof.
When using a credit card for purposes such as shopping, it is important to understand that you may either end up paying more (as you’re not using cash) or end up overspending. Things get out of hand when you spend beyond your budgetary allocation and you do not realize you are overspending as you’re not paying in cash. The effects of overspending while using a credit card may not be felt immediately but in the long run this could have serious repercussions on your credit rating. This is especially if you are unable to clear your credit card debt. To avert such an eventuality, it is financially advisable that credit card holders should use their cards sparingly and consciously.
Credit card holders are very susceptible to fraud especially when dealing with untrustworthy merchants. This is because such merchants may charge more than required thereby end up stealing money from you. Other than this threat of fraud, card holders also have to deal with high interest rates and monthly rates charged by banks. These charges coupled with a high credit card balance are likely to lead to high credit card debt. Clearing this debt may pose a massive financial burden to the credit card holder such that there may be need to apply for credit card debt consolidation.
Paying bills and daily maintenance are mainly the main factors that lead to most people to apply for credit cards. These cards allow their holders to shop and pay for bills without cash and pay off their card balance at end month or any other time. In short, a credit card allows you to shop for what you need while broke. As such, a credit card can be a real life savior but only when you do not overspend.
Credit card fraud comes about when your card gets stolen or when someone steals your identity and uses your personal details to apply for a credit card. Identity theft has become a very common vice in the present day with millions of people falling victim of this vice day in day out. The best cautionary measure to take in the event that you lose your card is to contact your bank (card issuer) immediately. This is so that the card can be blocked such that it can no longer be used in paying for any transactions. Research shows that millions of dollars are stolen everyday through credit card and identity theft.
Advantages of a credit card
One of the best things about being in possession of a credit card is that it gives you the power to shop or pay for anything anywhere and at anytime. Most credit card limits are set very high as a way of luring you to spend more. This is because the more you spend, the higher the interest that you will pay back to the issuer of the card. The high credit card limits are very beneficial especially when you need a huge sum of money all at once. Even so, the limit can be quite damaging to your credit card rating as it may lead you to fall into big debts.
With a credit card, you do not need to constantly borrow cash from family and friends. This is because the card presents you with the cash when you need it and wherever you need it. As such, it is a reliable and dependable source of cash when you need it.
Caution when using a credit card.
When using a credit card, you can not afford to be careless. This is because a slight mistake can be quite expensive especially incurring unexpected losses. When using your credit card for online purchases and payments, you need to be extra careful. This is because the internet is full of hackers who are always on prowl for unsuspecting credit card holders. When making an online purchase or payment, most merchants will require you to submit important personal information alongside your credit card number. Armed with this information, hackers can use their skills to steal from you or using your details in the most unexpected way.
For purposes of minimizing the risks and losses associated with the use of a credit card, it is advisable that you should source avenues of securing your credit card. In addition to this, it is also important to identify the best ways of spending within your means. This helps in averting a possibility of getting into bad credit card debt.
What to do when credit card balance gets out of hand?
When your credit card balance gets out of control, you should consider applying for credit card consolidation. This consolidation is also quite beneficial when your credit card debt has pilled up and you are unable to repay back the debt. Credit card consolidation is an effective debt management strategy that makes it easy to clear credit card debt. You only need to identify the best consolidation company that offers the best terms as well as policies to its clients. Though there are lots of credit card consolidation companies, it is important that before settling on any company you should consult a professional for advice. This is so that you can make the right decision as far as choice of the best company is concerned.
The best thing about a credit card consolidation company it bargains for a reduction of your unsettled credit card balance as well as a reduction of your interest rate. They however need to see your financial situation for them to know the best way of solving your problems and offer you the best solution.