They say that credit cards are among the most unforgiving type of loan due to their strict due dates and high interest rates. It sounds scary, but when you’re a wise spender, you can turn these plastic cards into a valuable tool to efficiently manage your personal finances. But before you can feel like a boss with your credit card, you need change your perception towards these financing tools.
Do you have the tendency to agree to the statements below? If so, then it’s time to change your mindset.
Credit cards extend your buying capabilities.
Some people buy a lot of stuff the moment they get their cards, reaching their credit limit by accident. The problem lies with the mentality that your cards expand your buying power. While that’s true, it doesn’t mean that your buying capabilities are also extended. You may have the opportunity to buy more items than before but if your actual income remains, you’ll be in a lot of trouble if you max out your credit.
Credit cards are tools towards financial self-destruction.
On the other end of the spectrum, some people are averse to owning even one credit card. That would be wise if you’re a compulsive buyer. But if you’re an ordinary spender, you don’t have to treat credit cards as evil. In fact, credit cards offer great conveniences when buying important monthly groceries and paying bills. With the right card at hand, you can also earn points and rewards that can provide you with free items or services. Just make sure to choose a credit card program that best suits your lifestyle.
Friends with credit cards can help you buy the electronics you need.
People with credit cards know the burden they have to carry when someone else uses their card to buy pricey items. So don’t have a grudge against your friends if they won’t let you buy your appliances with their credit card. It’s actually the same with asking them to be your guarantor for a loan; that’s a heavy responsibility most especially for someone who’s real careful with his or her expenses.
You may have the capability to pay off the monthly due in the next few months, but what if you get sick, or worse, die? Then you’ll be leaving your friend paying for the heavy monthly dues that aren’t even his or hers in the first place. People without credit cards just don’t understand the dire consequences when someone miss out on their due dates, thus, they just make casual requests to be late on their payments, which causes real trouble to credit card owners.
Whether you have a credit card or not, the simplest thing you can do is don’t spend beyond your means. Make sure to monitor your expenses to avoid spending in amounts greater than your income. And if are eyeing a big-ticket item, make sure to save for it so you can have enough finances to pay for it.