Credit cards are often one of the biggest financial obligations and tests of responsibility that anyone can take on when it to their finances. While there’s certainly a lot of financial freedom and convenience that you can enjoy by getting a credit card, you must remember that it’s important to use it responsibly. Using it the wrong way may put you in a very difficult financial position.
So, what makes a good credit card holder? As lending companies for credit card processing might tell you, it’s a mixture of good money management, a mindset that doesn’t spend unless you need to, and a great deal of personal discipline. Of course, your bank or credit company is just as important of a factor as your own actions are.
If you’re about to get your newest credit card or just got yours in the mail, here are some things to keep in mind:
1. Remember why you got that card in the first place
Why do people get credit cards? There’s a lot of reasons: either they want to improve their credit rating, have some kind of buffer for big purchases, finding themselves bothered by bringing around cash. These are all perfectly valid reasons as to why you got that credit card.
However, it’s important to keep in mind that a credit card works as an extension of your ability to spend cash that you already have, not cash that you don’t. Credit cards work best as a better way to spend your money; any other use of them would most likely sink your credit score and plunge you into debt.
That is why it’s important to remember the exact reason you got that credit card, to begin with. It’s a good way to remind you to not stretch your finances beyond your control and to be extra careful with its use.
2. Maintain good communication with your bank
While it doesn’t necessarily mean dropping by every other week at your credit card’s bank to have a friendly chat, having a good relationship with the bank can go a long way into making sure that your credit card doesn’t give you any more headaches than you may possibly need.
You have your usual methods of keeping your relationship with your bank: paying on time, not going over the credit limit, and keeping with the terms and agreements that you signed when you took the credit card. On the other hand, you also have your credit behavior—what you buy with your card and how exactly you repay the bank—as well as your relationship with your creditor when it’s time to pay.
With these two things in mind, keeping a credit card wouldn’t exactly be easy, but it’ll be far from the logistical and financial nightmare that it can sometimes be. Proper management and discipline can turn a credit card into a tool for financial freedom with very little drawbacks. Follow these tips to avoid any problem that your credit card may bring in the future.