Tips for Responsible Credit Card Use

There are many advantages to taking out a credit card, including the freedom of not always needing cash and the ability to build your credit through repeated use. However, it can be easy to become heavily dependent on your credit card and to not notice the accumulating charges until that monthly bill arrives in the mail. Here are some tips to help you keep track of how many expenses you charge to your credit card each month and how to pay them off on time.

Research your credit card company

Shopping for a credit card is similar to shopping for any major investment in that you want to find the best value. This means you want a card that best suits your financial needs through reasonable monthly payments and interest rates. One way to compare the rates of different credit card offers is by visiting the Federal Reserve System’s Survey of Credit Card Plans and comparing your potential rates to those of leading credit card companies in the nation.

Limit your spending to what you can afford

Just because your credit card company has set a certain spending limit doesn’t mean you should actually spend this limit. Before you begin using your credit card for everyday purchases, you should set out a monthly budget that shows how your living expenses compare to your monthly income. This will help you determine how much disposal income you have each month and what your real credit card limit should be.

Pay the balance off each month

The interest on credit cards quickly begins to build on the balance you don’t pay, meaning that your debt could easily double in a matter of months. You can prevent this from happening by paying off as much of your monthly balance as possible, even if this means paying more than the required minimum balance.

Cutler & Associates, Ltd. has provided quality legal representation to individuals in the Aurora and Schaumburg area for more than two decades. We specialize in consumer bankruptcy and our attorneys are committed to helping individuals secure their financial future.