Sucked Into Debt!
An average household in America with a credit card has around $15,000 in credit card debt.
With a credit card in your pocket, you never have to worry about not having enough cash to pay for a purchases - the dues can be paid back later. Credit cards are also accepted by most places, so you don't have to carry bundles of cash with you everywhere you go.
Besides this, did you know that credit cards are much safer to use, or rather lose, than debit cards? If someone uses your debit card for a purchase, the money is lost immediately, but in case of a credit card, the money might stay there for a couple of weeks, and give you time to notify the authorities.
For all its advantages though, a credit card is also the source of worry for many Americans - apart from dragging their finances down, it can also be used for assessing your private information and stealing your identity. A credit card, above all things, is a huge responsibility, and should be treated as such.
Here are some important dos and don'ts for using a credit card -
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The Dos of using a credit card
✔ Sign the card as soon as you receive it.
✔ Read the fine print.
✔ Read all bank notices - both for benefiting from promotional schemes and to know of any changes in policy or interest rates.
✔ Use 0% interest schemes and cash-back/reward points.
✔ Keep multiple cards, depending on your spending habits.
✔ Use only reputable, trusted stores as far as possible to minimize fraud.
✔ If you have handed your card over to a cashier or waiter, keep a close watch on your card till it is returned.
✔ Check the receipt after each transaction and before signing.
✔ Keep a close watch on your expenses, checking the bank statement regularly.
✔ Note down any major transactions (anything valuing over a $1,000), and save the receipts.
✔ Spend responsibly - only as much as you can pay back at the end of the month.
✔ When making an online transaction, make sure the page you are giving your account details has an 'https' in its address bar.
✔ Password protect your computer, laptop, and all devices.
✔ Inform the concerned authorities immediately in case your address has changed.
✔ Notify the bank if you cannot pay the balance when it is due, they may waiver the late fees for a few days.
✔ In case the card gets misplaced or you notice any suspicious transactions, notify the authorities immediately.
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The Don'ts of using a credit card
✘ Don't forget to take back the card from cashier after a purchase.
✘ Avoid using the same PIN for all your cards.
✘ Do not use birth dates, anniversaries, and phone numbers as a PIN password.
✘ Never forget to collect your receipts. If you don't want a receipt, tear it and make sure the credit card number is not legible.
✘ Don't write your account number, credit card number, or PIN anywhere. Memorize them.
✘ Do not use a credit card to withdraw cash.
✘ Never exceed 30% of your credit limit for all the cards you possess.
✘ Don't make late payments - credit cards have a very high interest rate and hefty late fees.
✘ Don't just pay the minimum amount on your credit card - it can hurt your credit rating.
✘ Never leave any documents - bank statements, bills, etc., mentioning your credit card details in the mailbox for too long.
✘ Avoid keeping old credit cards - If you haven't used a card for over 4 months, it must be destroyed/returned, and the account closed.
Any debt you incur on your card will show in your credit rating too. A credit card can be great, if you are a responsible spender and keep all your documents organized. If not, it can be a big liability, by putting you in debt, giving you a bad credit rating for years, and may also be used for identity theft. By following this guide to using a credit card, you can stay safe, and even reap a few benefits out of your card(s).
