| A credit card can be an asset to your lifestyle, but if | | | | carefully consider all of the factors and weigh them |
| not handled carefully it can become a liability, | | | | against your personal needs and values. |
| especially if you find it so convenient and easy to use | | | | What about credit card control? |
| that you lose control of your spending. | | | | Handling money and credit cards wisely is a talent |
| This short guide will help you understand how you | | | | few of us are born with. But it is a skill that can easily |
| can use your credit card so it works to your | | | | be learned. The place to start is with budgeting. |
| advantage, not against you. | | | | What is a Budget? |
| Advantages | | | | It's simply an organized way of managing your |
| A credit card can: | | | | finances, basically, it gives you an overall picture of |
| 1. Offer free use of funds, provided you always pay | | | | where your money is coming from, when it's coming |
| your balance in full, on time. | | | | in and how it's being spent. A budget should be |
| 2. Be more convenient to carry than cash. | | | | flexible, changing according to your circumstances. |
| 3. Help you establish a good credit history. | | | | Why Budget? |
| 4. Provide a convenient payment method for | | | | Budgeting helps us achieve short-term goals like |
| purchases made on the Internet and over the | | | | paying the monthly bills on time; it's also for |
| telephone. | | | | longer-term financial goals like buying a home, a car, |
| 5. Give you incentives, such as reward points, that | | | | paying for an education, a wedding or a holiday. |
| you can redeem. | | | | When you take control of your financial affairs, |
| Disadvantages | | | | you're more confident about the future. |
| On the other hand, credit cards can: | | | | A budget is key to financial control. It gives you a |
| 1. Cost much more than other forms of credit, such | | | | "Polaroid picture" of where you stand financially and |
| as a line of credit or a personal loan, if you don't pay | | | | where you're heading. |
| on time. | | | | Credit card control tips |
| 2. Damage your credit rating if your payments are | | | | Use a low or no-fee credit card and save on the |
| late; | | | | annual fee that some companies charge. |
| 3. Allow you to build up more debt than you can | | | | Only charge to your credit cards what you can pay |
| handle; | | | | off in full when the bill comes. |
| 4. Have complicated terms and conditions; | | | | You might not use your credit card as much if you |
| What is a credit card? | | | | start believing that you have to pay off your entire |
| A credit card is more then a simple piece of plastic, it | | | | balance at the end of each month. |
| is first and foremost a flexible payment tool | | | | A good way to help to reduce what you pay on |
| accepted at 30 million locations worldwide, and if the | | | | your credit card is to search for a card with a lower |
| card balance is paid off every month, then no | | | | interest rate. Many financial institutions now offer at |
| interest is charged on purchases made so, essentially, | | | | least one of these types of cards. |
| short-term credit is granted without the consumer | | | | Remember that when you take a cash advance on |
| paying any interest. | | | | your credit card, the interest starts accumulating |
| Among its many features it provides: | | | | immediately and not on the due date of your credit |
| 1. Access to unsecured credit (no collateral required | | | | card bill. |
| against amounts charged) | | | | Also keep in mind that if you make only the minimum |
| 2. Interest-free payment from time of purchase to | | | | monthly repayment you may never get out of debt. |
| the end of the billing period | | | | Conclusion |
| 3. Instant payment of purchases, allowing for instant | | | | The main advantage of having a credit card is |
| receipt of goods and services | | | | convenience but if you're not good at budgeting and |
| 4. 24/7 access | | | | managing your finances, the over-use of credit cards |
| 5. Fraud protection | | | | can leave you with a debt that's very difficult to pay |
| However before you decide to use your credit card, | | | | back. |