The 8 rules of credit cards

There are some things to con­sider be­fore get­ting a credit card, and some good strate­gies for man­ag­ing them.

Element - - Finance -

1. Shop around for the best deal: credit cards come with vary­ing in­ter­est rates, fees, and re­wards pro­grammes. Take time to se­lect the credit card that best suits your cir­cum­stances. 2. Know the in­ter­est rate you’re pay­ing on your credit card: many credit cards charge high rates of in­ter­est, which can prove ex­pen­sive if re­pay­ments aren’t met. 3. Re­view your credit card limit: base your credit card limit on how much you can af­ford, not how much you might spend. If you think you will have trou­ble pay­ing it back, de­crease your limit. 4. Pay the bal­ance off in full each month: you can only take ad­van­tage of in­ter­est-free days if you pay the bal­ance in full at the end of the month. If you can’t af­ford to pay the bal­ance in full, at least try to pay more than the min­i­mum re­pay­ment to save on in­ter­est costs. 5. Don’t use your credit card to with­draw cash: Don’t with­draw cash from your credit card – banks charge high fees for this. Cash you with­draw at­tracts a high in­ter­est rate from day one. 6. Be wary of ac­cept­ing a higher limit or ad­di­tional card: If you let your bank raise your credit limit, or give you an­other credit card, you in­crease the risk that you’ll end up pay­ing in­ter­est. Also credit cards usu­ally have an an­nual fee, so the more cards you have, the more fees you pay. 7. Avoid temp­ta­tion: If you can’t re­sist the temp­ta­tion to spend more than you can af­ford, leave your card at home. That will give you time to weigh up whether your pur­chase is es­sen­tial or just nice to have. 8. If you’re in trou­ble, talk to your bank: If your credit card is get­ting out of con­trol, talk to your bank about op­tions for clear­ing your credit card debt. You may be able to take out a loan to pay off your credit card and pay off the loan at a lower in­ter­est rate.

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