Credit cards – a necessary evil that can be mended for your requirements

By Leni Parrish on January 20, 2012

Credit cards can be a necessary evil as they can save you money and make spending far more convenient and safe, compared to debit cards or cash. Credit cards come with their own set of disadvantages too, which is why you need to discipline yourself in order to make the most out of them. Credit cards can help you save money and avail excellent offers if you are careful enough to stick to your good spending habits.

It is important to maintain a high credit score as that leads to lower interest rates on car and home loans, lower premiums for life and auto insurance and low APR on credit cards. Thus, by maintaining an impressive credit history, you are showing that you are creditworthy and deserve preferential treatment. Credit cards can be used to build that credit score as long as you are disciplined enough. Firstly, it is always important to keep track of your spending and keep your outstanding balance as low as possible. As the outstanding balance increases, taking up a bigger chunk of credit limit, your credit score drops too. So you need to spend only on things you need, irrespective of the deals and discounts, although spending with credit cards is extremely easy.

Credit cards can provide benefits when you spend judiciously. You need to remember that even if you don’t need immediate cash to purchase something, you need to repay sooner or later and that is where you have to be wiser. It is important to review your monthly expenditure report thoroughly to make sure there are no fraudulent transactions. The report also helps you assess your expenses so that you can avoid the unnecessary ones in the future.

It is important to pay out the outstanding balance as quickly as possible instead of waiting for the grace period to come to an end. You can use your credit card to make a big purchase and repay it before the grace period ends. If you can put that money to better use, you can delay repaying, but otherwise it is not a good idea to go all the way to the last date to pay your credit card bills. You should also utilize your credit card to pay back all your other bills on time by preferably automating the payments. This will help you not to miss any deadlines and hence enhance your credit score.

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