Cash is dying. Plastic is ruling the world of finance. As we step into the spree-yearning world of shopping, armed with full carts and credit card(s), there are a few things you should know about your credit card that you probably don’t already know.
Our parents may have taught us the importance of saving from an early age, but not enough about the impact of a credit card on our finances. In fact, nothing could have prepared us for what to expect.
The following are some things you should know about your credit card.
58% of credit card balances are incurred interest
One of the biggest banes of owning a credit card is the interest rate. Today, about 58% of credit card balances charge the holders and interest. This can hurt your credit score in many ways. If you find yourself trapped in the mire of paying interest on the accrued balance, you may want to switch to a card with 0%. However, it is important to note that the best 0% deals are usually kept for people with an excellent credit history.
Credit cards charge you additional fees abroad
Are you one of those who enjoy traveling? While you can use your credit card to make purchases overseas, did you know you could be charged more for cross country processing fees? Many credit card companies charge holders for foreign transactions. This can sum up to 3% and skyrockets again during the holidays. However, there are some credit cards that are designed to be used abroad. It may be in your best interest to opt for such cards specifically during holiday trips.
You should own only one or two cards
The temptation to own several credit cards is real. With the unlimited overdrafts and attractive interest rates, many people are drawn to the attraction of buying whatever, whenever. Unfortunately, the more credit cards you own, the higher your chances of accruing debt. As you prepare for the future, you want a good credit score to improve your chances of obtaining a loan for major financial obligation. The best way to minimise this expense is to keep credit cards to a minimum.
You can monitor your credit score with your credit card
More and more credit cards are providing a way to monitor your expenses. Things like your credit score and monthly statement are provided to give you an idea of your spending habit. It is services like this that can help you track your cash-flow and budget accordingly. If you didn’t know, this feature could be what you need to stay on top of your finances.
Get discounted shopping online
In the days of our parents, online shopping was not yet as common (even non-existent). As such, credit cards at the time didn’t offer discounts on purchases. To keep your costs low, look out for those credit cards that have shopping portals with discounts. They often have a partnership with the online store for this purpose. Rather than spend more, why not it get cheaper? Of course, it goes without saying that it is not everything you must buy- even if it is offered at a lower price. Practice savvy shopping and your finances will be better for it.