Got Your First Credit Card, Now What?

As we celebrate 'Get smart about Credit Card’ day today, it's time to get smart about it


You are smart, you know what you want, display a high level of social consciousness and have absolutely no inhibitions when it comes to experimenting new things. But when it comes to impulse shopping, you may find yourself with limited control to splurge, and having a credit card doesn’t help.

Get Smart About Credit Day is ideally celebrated by dropping by your financial adviser to check on your finances – your income and your expenses. However, if you are too lazy or too busy to meet your financial adviser (or don’t have one) just take a note of these three basic tips to get smart about Credit Cards:

1. Know the numbers and dates

You definitely should first get this straight that a credit card surely reduces your burden of small loans, but did you know credit cards have higher interest rates than most consumer loans? When a car loan says 10% is it per annum, when a credit card says 3% it is per month! 36% interest is a huge burn on anyone’s pocket. Though Credit card gives you the power to purchase things which are not in your budget, that may encourage the shopaholic in us all the time. To avoid ending up in heavy debt, always pay off the entire credit card balance before due date. If not, at least pay 2 times the required minimum balance due.

2. Remember the credit card is not an additional source of income

Running to a bank to get a loan for emergency expenses like a hospital bill or air ticket purchase would be practically stupid. This is when credit card comes as your savior. But that’s not a way of life, it is an exception. We should aim to live within our means. Most of the times people take it their credit card limits as an additional source of income, it clearly is not. Before swiping your credit card next time, ask yourself this simple question “If I had to pay cash for this purchase, would I still buy it”?

3. Do not swipe when you should be cashing

Do you swipe your credit cards for just about every financial transaction from buying vegetables from a supermarket to you buying a movie ticket? If so, this habit will soon create an overabundance of uncalled for debt. Do not use credit cards for purchasing food, medicines and other small items, small but consistent pile of debt can eat away a lot of your actual money via interest. Petty and everyday stuff can be bought with cash or use a debit card.

Your future will be built on the back of financial security. So get smart about credit card. Do let us know if our tips were helpful to you in the comment section below.