Posts Tagged ‘Amount Of Money’

Although acquiring a credit card is much easier than adhering to a budget, planning your credit card expenses is esential to help prevent dire consequences from credit card utilization. This may stem from the fact that a credit card is by no means a mobile automated teller machine. It is however a means to get you out of an emergency situation such as a car breakdown, or for travel convenience. The following budgeting tips will provide you with great insights on wise credit card usage.

Spend within your capability

With or without a credit card, one should always spend only what they can afford. In fact, you should spend like you dont have a credit card because at the end of the day, you will have to pay back what you charged. It is true that you should never use your credit card to settle your grocery bills or to quelch your shopping needs. With all the discounts and bargains clamoring for your attention, it can be annoying to know that you will be paying more for it because of credit card interest rates.

Have a good concept of the Credit Limit

Rather than viewing the credit limit as the amount of money you can use every month, think of it as a loan that you must repay within 30 days. Then, tabulate the amount of interest that you have to pay if you decide to settle your repayment over a period of six months. This way, the 7500 will look less tempting and when calls with offers of higher credit limit plans come in, you will have the good sense to put the phone down.

Do not let your credit accumulate

You need to be responsible to own a credit card but as luck would have it, there are emergencies that are unavoidable. In this case, you should settle your credit card bills as soon as possible. You have to be self-disciplined on this because credit accumulates and credit cards work on compound interests. The longer you delay your repayment, the more you have to pay.

Banks and their marketing associates and divisions are vying with one another to capture a thick slice of the credit card pie. Offers by phone and mail of free credit cards, pre-approved credit cards, cards with special bonanzas, money back schemes, low introductory rates, and umpteen other perks pour in tempting you everyday.

A credit card is just a form of borrowing that does not come free. Credit terms, interest rates, fees and more can lay a stress on your bank balance. Credit cards are a temptation to spend now and pay later. What invariably happens is that people spend more than they can handle.

Informed consumers must always weigh carefully the pros and cons and compare different options before deciding on a credit card.

Before you decide find out

The advantages of a credit card are that it is a safe alternative to cash. Prevents loss as well as theft of cash. Using a card wisely can build a good credit history which helps when you need a loan or subsidy. It is useful in emergencies like accidents, urgent hospitalization, and unavoidable circumstances like natural calamities and so on. It grants a breather and gives you time to pay the bill. Some memberships offer travel or accident insurance to the card owners at no cost. They also offer privileges like discounts at restaurants, shopping malls, and holiday packages.

The other side is that you can get carried away and live beyond your means, ultimately falling into debt.

To be eligible you need:

To be at least 18 years old.

Have some income or the backing of credit worthy parents.

Have an operational bank account.

A telephone.

A good credit rating. Your monthly expenses must not equal or exceed your income. Ideal expenses must account for approximately 50% of your income.

To get a Visa or Master card your income must exceed US 12,000 a year. Or, you need to apply for a secured credit card where you pay upfront a certain amount of money as security deposit.

There are many kinds of credit cards to choose from. Unsecured standard and classic cards are those with a credit limit of US 2000 and generally charge higher interest rates and offer lower or less favorable terms than the platinum and gold cards. Unsecured platinum and gold cards are for people with high credit ratings, and the limits for these cards are between US 2000 to US 100,000.

Here are a few links that will give information and opportunities to apply for cards online:

Visa at http:www.usa.visa.com?country=us&ep=v_gg_new provides information, gives tips, and has listed a number of financial institutions that offer Visa cards and a wide range of services. One can apply for a card online.

MasterCard International at http:www.mastercard.comindex.html is comprehensive with information, advice, and options of choosing and applying for a card online. They have an online form which when filled will give information of which card would be ideal and a channel which provides instant comparison of various card options.

CreditCards.com at http:www.creditcards.com has articles, FAQs, a site map, and online application channels.

Tips:

Pick a card because it has the lowest APR.

Pick a card because all its terms and conditions have been carefully vetted by you. Read the fine print.

Never pick a card because it is free for a year or life.

Do not choose a card because it offers a low introductory rate.

Do not choose a card because it has a cash back policy or great rewards programs.

Choose wisely and live debt free.