Credit Cards are one of those things in life that everyone wants but only few can have and even fewer can keep. But have you ever wondered why is that so? Why are Credit Cards so lucrative yet so difficult to hold on to without destroying your credit credibility? Well, it is not the card that is to blame, it is the user awho tens to misuse the card and then get late in repaying the instalments.

Keeping this in mind, here are 5 ways in which you can use your credit cards responsibly and even build a good credit score that’ll benefit you in numerous ways.

5 Ways To Use Credit Cards Responsibly

1. Read And Understand The Credit Card Agreement & Terms Of Payment Carefully

Always make sure to get your credit card from a reputable establishment and while signing your name make sure that you first read and understand the entire agreement (maybe by taking help of the agent/broker or banker helping you) – clause by clause and term by term. The most important things to look out for are – the credit limit, the payment period, the instalment system to pay the credit and the interest rate as well as penalties. We all like to think that there won’t be any hiccups, but when it comes to credit cards, it is better to be cautious than pay heavy penalties (which, over a period of time, grow higher than the credit itself in many cases.)

Also, be very wary of shady institutions and their lucrative offers as you don’t want to end up being a victim of the ever-growing problem of credit card fraud. Be aware and make an informed decision. Make sure to do your research first! Click here to know more.

2. Use Credit Cards Smartly

First off, you won’t end up in a soup if you use the card carefully and smartly in the first place. People tend to binge-spend on unnecessary things thinking they will pay for it later when they have a warm credit card in their pockets. But what they forget it, if they buy the things they don’t even need and keep on repeating doing so, they will end up with repayments that they might not be able to pay off in time and suffer from late fee and interest on top it. And once you re caught in this cycle, it is very difficult to get out.

So the smartest thing to do is to use the credit card only when necessary – keep it for an emergency. Inc are if you have to use it, then use it only on the essentials such as fee payments, bill payments, medical expenses, etc.

3. Always Stay Below The Credit Limit

Keeping your credit card expenses under the credit limit will ensure that you always have some balance left for severe emergencies. Also, it will make sure that you never over step your limit and hit a penalty or wound up in a bad situation where you need the money but can’t draw it as you’ve already spent it to its limit.

4. Make The Payments On Time

Make sure to make the payments on time – or better yet before the due date. This not only helps you be ahead in your financial game but also provides benefit for your credit score. Also, while paying the monthly payments, make sure to not just pay the minimum amount, try and pay a little extra, it will help you in not only paying-off the balance quicker but also go a long way in helping your credit score. Which in turn will open a lot of door for you in future for loans and mortgages, especially if you plan to buy a house or a car in the near future.

Here’s some good information on why to Pay By The Due Date.

5. Don’t Skip Payments

NEVER ever skip payments. Apart from adding double amount in your next month’s payment, it will also incur heavy penalties making you end up paying. a lot more than the payment amount and will harm your credit score. This is something you do not want to do! So make sure never to skip on your credit card payments.

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So these are the 5 Ways To Use Credit Cards Responsibly. If you want to share your experiences with credit cards or have more useful information, please feel free to comment below.

In the end, using the credit card in a good or bad way is in the card holder’s hands (literally!) So before you blame the credit card make sure to do your research first and then make smart use of it. If handled properly, credit cards can be life-savers and come in very handy, especially in emergencies. So don’t hesitate from getting one, just be well-informed before using it.