That’s if you use it in a smart way. These tips can help you do that.
Your choice of credit card should depend on your goals. For example, do you want to:
Beyond that, compare the representative annual percentage rate (APR) on different cards, as well as any charges and fees.
You should be comfortable with your credit limit – so make sure it’s set at the right level for you.
If you're looking for some flexibility, and you’re certain you can afford it, you may want to ask your lender to increase your limit. On the other hand, if you’re concerned about being tempted to overspend, you can even ask for your credit limit to be reduced.
Some providers offer an introductory 0% interest period on purchases and/or balance transfers. This can help to manage debts by giving you more time to clear your balance before being charged interest.
Keep in mind, you should always make sure you can afford to repay anything you spend on credit. And you’ll be charged interest on the outstanding balance once the interest-free period ends.
Some credit cards offer rewards such as air miles, points, cash back, or miles. Different offers are available, so shop around and check the details to find one that works for you.
While rewards are good, don’t get swept up in them. Consider all the features and conditions of the card, including the interest rate and any annual fees.
If you don’t want to have to pay interest on purchases when using your credit card, pay off your balance in full each month. If you can, this will help you avoid building up debt.
If this will be difficult for you, pay as much as you can beyond the minimum payment to reduce the amount of interest you’ll be charged. You can stagger your repayments through the month if it helps – that way you chip away at your debt rather than having to pay it off in larger amounts.
If you’re busy, it can be difficult to manage all your repayments and bills. If you miss a payment, you’ll be charged a late payment fee, which will have a negative impact on your credit score. The simplest way to make your credit repayments on time, is to set up a Bill Pay.
If you’re looking for breathing space to pay off your credit card bills, a balance transfer may be a good solution. Make sure you understand the balance transfer fees you’ll pay and the total length of the interest-free period.
