When is the Best Time to Use Your Credit Card

When is the Best Time to Use Your Credit Card -diarynigracia

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Tips to Know When You Should Use Your Card on Your Purchases


Purchasing everything your eyes laid on can be very satisfying. Swiping or tapping your credit card is all it takes to bring home the awesome goodies displayed in the mall, and you can’t resist the urge to bring them to the counter. It sounds like impulsive buying, right? This is one of the factors that credit card has contributed to. If having a credit card has turned you into this, it is time to discipline yourself and knows when to pull out your credit card and when to keep it tucked away.

Minutes to Read: 5 minutes

Age Bracket: 21 – 40 years old

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A credit card may allow you to access exclusive promos and discounts and earn exciting rewards, but there will always be a downfall in every good thing. A lot has taken advantage of the power of credit cards and used them as long as possible, even if you don’t have to buy the thing you just purchased and spend above what you can pay. If you think you’re turning into this, it’s time to educate yourself and know the best time to use your credit card.




When is the best time to use your credit card?


Credit card is a potent financial tool that can help you gain financial success by improving your credit score or can be detrimental to you when misused. You can do a lot of things with that small plastic card, and it can be too easy for you to gain happiness by purchasing items that you do or do not need, but it can also cause you long-term debt once it kicks you down into a pile of debt. Being well-disciplined and a responsible cardholder might be difficult. But it’s the only way for you to avoid the mishaps of having a credit card.



Everyone knows that a cardholder must pay his balance in full every month to avoid piling it up and earning larger interest. Overdue, debts, and interests are some things that cause negativities on your credit card. However, I’m sure you have an idea of where it all started. Of course, you started it all. Swiping your card in all your purchases, even if you have the cash to pay for them, is the first step into financial failure. Once these bills have piled into something that you can’t afford, your credit score will be affected, which will cause you long-term damage since building your credit score and history back up is a mission impossible. Take note that the problem is not the credit card; the problem is your lack of self-discipline.



Of course, these awful scenarios are avoidable if you follow the proper steps! Taking a step towards financial discipline and literacy is the journey we all must take. If you like to take action, take this list you must remember when using your credit card that I have prepared for you. Always put it in mind, and make responsible choices.



When should you use it?


Reaching this part of the article can be considered a good thing because it means that you’re planning to make a shift in your life to lead your way into being financially responsible. If you have a credit card but only plan to use it for dire situations, here are some cases you can consider when to pull out and swipe your credit card.



1.     When you can pay off your balance immediately


Using your credit card for everyday purchases is perfectly fine as long as you can pay off your statement in full. Charging your purchases on your credit card can also help you build your credit and boost your credit score. Always limit your spending within your credit limit to avoid overspending and paying additional over-limit fees. Spending 30% or less of your credit limit would be best to maintain a good credit score and budget to spend within what you can afford.


2.    When it’s an emergency


Urgent financial responsibilities are something we can’t run off., May it be medical emergencies, car or house repairs, or needed items that have to be purchased. A long list of possibilities can happen when you least expect it, and having a credit card can be a saving grace. You can use your credit card to pay your unexpected expenses, and you need some time to save or earn before you can pay it off. However, you should pay your monthly statement more than your minimum to avoid unnecessary interest and piling it all up over time.



3.    When there’s an opportunity to earn rewards


Some credit cards offer exciting rewards, points, or air miles points. If you can earn some of these on certain purchases, you can use your credit card since using more of your rewards credit card gives you more reward points that you can save until you earn enough for your next travel trip for free or redeem awesome gadgets or merchandise. However, note that you still have to limit yourself and budget what you can spend in a month. Always remember only to spend what you can pay off. You might get caught up with all the rewards and points you want to earn but forget that you may accumulate specific points but sometimes have to pay back that amount.



4.    When you want travel protection


Bringing your credit card with you when you travel heightens the travel experience. Not only can you purchase things abroad and pay with your credit card, but you will also be covered with travel insurance when you use your card to pay for your travel purchases. Travel insurance like this usually covers up to ₱10 million, and it’s best to have them just in case of some inconvenience or a medical emergency. Travel insurance covers a lot of things. May it be lost luggage, delayed or canceled flights, and more. It will give you the peace of mind to enjoy and relax.



5.    When purchasing big-ticket items


Big ticket items are high-priced items that you can purchase; an example would be a television or a refrigerator. Purchasing items like these might seem a little risky to charge on your credit card since you will have to pay a huge amount on your next statement bills plus the interest it earned. However, purchasing items like these that are charged to your credit card can be advantageous. Credit card usually offers a 0% installment rate that you can pay for 9 to 12 months (or more!), while some can dispute the charge if an error is made. Additionally, a large purchase like this will allow you to earn a lot of reward points if you have a rewards credit card.



6.    When you shop online


Online shopping is now popular in our country, making fraud a common thing you can experience if you’re not careful enough. Using your credit card to make payments on your purchases online might save you. Credit card companies provide cardholder protection when a fraudulent transaction is made. You will be reimbursed if this situation happens, if your purchases arrive in a damaged condition, or if it doesn’t arrive at all. Always make sure you’re shopping on a safe and secure site to avoid these scenarios.



7.    When you have recurring payments


If you have an old credit card that you do not use and plan to deactivate it, I suggest you don’t. Keeping your old credit cards active will give you the advantage of maintaining and building up your credit score since it will add to your credit history. And if you have recurring payments such as subscription services that you have to pay monthly, you should charge it to your credit card since it will make your credit line open and active to continue to maintain or increase your credit score. Just always make sure that you can afford to make your payments on time.



When should you not use it?


We don’t want your credit card to cause you your financial destruction, that’s for sure. But it would help if you learned when is the right time to swipe your purchases. Life may be unpredictable and might cause you to spend due for a thousand reasons, but we can’t rely on our credit cards to save us all the time. Saving us in dire situations doesn’t mean that the chaos is already done; you might start chaos of your own. Credit card mistakes are common to all cardholders, and it’s up to you to educate yourself on these to avoid them.



1.     When you’re in a heightened emotional state


Rewarding yourself when you achieve something is fine, but using this as an excuse to spend might be something that must be stopped. Some people want to buy nice things to cheer themselves up during a bad day. However, these situations are unhealthy for your pocket and might cause it to go to zero balance. Avoid splurging and spending beyond your means that might cause you to leave a balance that will incur more interest doesn’t sound right to me. It is never a good idea to spend when you’re driven by strong emotions and use it as your “retail therapy.”



2.    When you haven’t paid off the balance


Budgeting and spending within your budget is a must towards financial literacy. There are also tough times that cannot be avoided when we use our credit cards. In these cases, we always can’t assure ourselves that we can pay it right away due to numerous things that might not go with your budget plan for this month, and plan to pay your credit card bill bit by bit monthly. If you still have a balance you haven’t paid off, avoid charging another purchase on your credit card, especially if you still can’t afford to pay it by your next statement bill. Suppose you continue charging new purchases on your card while you still have a balance; a sky-high interest rate might hit you up until you can’t afford it anymore. That is why maintaining a balance that you can afford to pay is enough.



3.    When you’re just doing it for the rewards


I may have said that using your credit card to earn rewards might be the best time. However, cardholders who held onto this thought might have taken it too far. Always do the math before using your credit cards if you’re just in for the rewards and cashback. Before charging your purchases on your credit card, make sure that there are no hidden fees you have to pay that might negate the rewards you might earn. If this is not the case, always think about it if it is worth it.



4.    When you’re using it for quick cash


There may be situations when you need cash the most, and this may be a reasonable reason if it’s urgent. But if it’s not and you depend on your credit card even when you really don’t need it, you must stop this kind of habit. Given the credit card’s cash advance feature, relying on this can be a considerable cause of being in a debt trap since using this feature requires you to pay a hefty fee. The interest rates applied to the cash advance amounts can be higher than the regular annual percentage rate. Imagine the interest and fee that will cost you.




5.    When you’re suspicious of fraud


Fraud is now widespread on the internet, and sometimes, it can be quite alluring sometimes. But be wary of where to fill your credit card information to avoid experiencing scams, fraud, or phishing. Unknown sources such as over-the-phone calls, email, or even unsecured WiFi in a public place cannot be trusted. If you travel a lot and usually use your credit card to make purchases, always use a VPN to protect yourself from these kinds of illegal acts. Despite the possibility, credit card usually comes with fraud liability, so you don’t have to worry that much if you become a victim.




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