You can use your first credit card towards building a strong financial future. You can establish a good credit score or build a mountain of debt that you will experience the struggle to pay for many years. Thus, before using your credit card, here are some tips to guide you unto the right path:
Check your Statement Regularly
Every month, your credit card issuer such as EasyCredit.com.sg will send you a statement of the past transaction details from the previous billing cycle. If you have scheduled your monthly payment, you must read thoroughly your billing statement. Review it thoroughly and catch for unauthorized charges or errors. If you find any of these, make sure to report them to your credit card issuer immediately.
The majority of the credit cards come with a $0 liability guarantee from money lender. This means that you won’t be held responsible for fraudulent charges. However, you could lose that guarantee if you did not report errors on your account immediately. The law provides that you will have to cover the $50 unauthorized charges depending on how immediate you report them.
If you download the app or create an online account, you can check your credit card transactions in real-time and spot the errors sooner. You can also set up alerts that will help you catch up on any errors right away.
Create a Budget
A credit card is one way to buy things while earning rewards. However, you must not use it to buy products and services that you cannot afford. If you have a realistic amount that you can spend and pay off as the month ends, this will keep you from getting in over your head.
You can try using the 50/30/20 budget method. Spend 50% of your take-home pay on necessities like groceries and housing. Then, spend 30% on the items that you want but do not need. Lastly, put 20% as your savings. This will help keep your credit card spending in line with your income.
Pay your Bill Full Every Month
The credit card issuer will require you to make the minimum payment that refers to the percentage of your outstanding balance. Sometimes, this sounds less expensive and much easier to do. However, this will costs you more money in the end.
If you only pay for the minimum at EasyFind.sg, it will add interest to your balance every month until you pay in full. Your balance will only decrease by a small amount every month because only a portion will be applied to the interest. As such, it is best to pay the full amount to avoid the huge interest fee.
If you have selected a rewards credit card from money lenders, see to it that you understand the program. Maximize the points that you earn by spending in the categories that provide the most rewards. Examples are restaurants or gas purchases. Some rewards have an expiration date so make sure that you utilize them right away.
Set up Automatic Payments
It will take time to get used to paying your bill for each month. Protect yourself from the late credit card bill whenever you schedule automatic payments before your due date. See to it that the scheduled payment is more than the minimum payment. Also, make sure that you have enough funds in your account before the payment is scheduled. Otherwise, you will be charged with a returned payment fee or late fee.
Moreover, paying on time is very important since payment history is one of the biggest contributors to your credit score. Thus, make sure to pay your credit card on time so you can maintain your score strong.
Your credit card payment is due on the same date for every month. This makes it easier to be up to date with your payment schedule.
Take Note of your Purchases
One essential step to take note of is calculating the amount that you can afford to spend. Thereafter, be diligent in tracking your purchases for the entire month with the help of your credit card’s website or app.
Once you have discovered your monthly spending limit, avoid using your credit card not until you have paid off the balance. This kind of discipline will help you have a good credit score. This will also keep you out of credit card debt.
Use as Little of your Credit Limit as Much as Possible
Sometimes, it can be tempting to use all of your credit cards. However, you must not use it. Credit utilization pertains to how much you are using your credit card limit. This is one contributor to your credit score. This means having a large credit card balance and carrying it each month can hurt your score. Moreover, it can set the foundation for getting into credit card debt which takes too long to pay off.