How to Use Your Credit Card Wisely (2016 Update)

How to use your credit card wisely
How to use your credit card wisely

Your credit card can be your biggest asset as well as your biggest liability depending on how you use it. Credit cards are meant to help you stretch your payments so that you only need to pay at the end of every month. The biggest nightmare of credit card holders is not being able to pay for the things that they spent on the due date. However, this nightmare can be avoided by knowing how to manage credit card wisely. In this article, I’ll be discussing some tips on how to do just that.


Choose The Right Card

In countries like Singapore, the credit card market is highly saturated as there are many credit card issuers out there. With so many of them shoving flyers and ads into your face, which one are you going to choose? One thing to remember is that there is no “best” choice for a card. The uncle next door or your friend’s card may not be the right card for you, so don’t believe people when they recommend cards.

The best way to go about is to choose a few good credit cards and shortlist them one by one depending on the benefits. You must choose the card with features that best support your lifestyle, spending habits, and expectation of rewards.


Plan Your Payments Wisely

To manage credit card wisely, you must plan your payments well. You must never miss a payment or pay late because these will incur high interest, which adds to the expenses on your part. This is why you have to plan your payments and schedule them according to priority.

All cards have a credit limit where you can cap your spending using the card. Always make sure that your credit limit is lower than your monthly income. You must also have an emergency fund that can pay for all your bills including the credit card bill.


Availability of Rewards

Most credit cards offer a lot of rewards to their clients. In Singapore, all credit card issuers offer really huge cash backs or rebates which can help lower your bill significantly. Each card has different kinds of cash backs. For example, one card may have a big cash back for restaurants while others focus on groceries. Since the card already offers this, make use of it to save money.


Waive The Annual Fee

If you’re very meticulous with your bill, you’ll notice that there’s going to be a charge known as the annual fee. The customer service representative can waive this one.The annual fee usually shows up in the month of your card’s expiry date.

Just ask a rep to waive them, so you don’t have to think about them. If they refuse, review the cash backs that you can have per month. If the cash backs can cover the fee, then you may continue. However, if the annual fee is bigger than the cash back, I suggest you cancel your membership and look for other alternatives.

Handling a credit card takes some skill and knowledge of the system. If you want to manage credit card wisely, you have to study how the credit system works and work your way through it. Don’t apply for a credit card without first knowing what you’re getting into.

Check out the other article we have on credit cards as well! We busted 5 of the credit card myths 🙂 If you have huge amounts of credit card debts, consider our debt consolidation plan. We will tailor the consolidation loan just for you. Drop us a message if you’re interested in getting a loan or even to enquire more 🙂 We are open everyday including Sunday except for public holidays!

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