Tips to use Credit card responsibly
A credit card can be a very helpful financial tool. Making consistent, on-time payments can boost your credit rating, and some cards offer rewards for purchases or even a 0% interest rate for a short period of time on balances transferred from other credit cards.
But if your credit spending gets out of control, monthly payments and accumulated interest can become a problem. Follow these credit card tips to help avoid common problems.
Pay off your full balance : Avoid paying interest on your credit card purchases by paying the full balance each billing cycle.
Use the card for needs :
Credit cards can be used for daily needs, filing up fuel or on emergency situations, such as a mobile phone bill that’s due before your next payday.
Never miss your payment : Pay your bill every month, missing a payment could result in a late fee, penalty interest rates and a negative impact to your credit score.
Credit card as a budgeting tool: Make all of your purchases with your credit card, you can see exactly how much you’ve spent at the end of the month and make the full before the payment.
Use a rewards card : If you’re using a credit card for most your purchases and making full payment on time, you are not only avoid paying interest but earning rewards as well such as cashback, air miles or retail points.
Always use 30% of credit limit : By using this method you can keep your credit score healthy is to keep your credit utilization ratio under 30%. For example, if your credit limit is AED 1,0000 all the times you should keep your balance under AED 3,000.
Protect against fraud : There is no full proof way to prevent all instances of credit card fraud and theft, understanding and adopting a few best practices can help reduce your risk.