This is a Guest Post.
Millions of people all over the world have credit cards, but some continue to use them incorrectly. A credit card is still a form of borrowing, and it can land you in debt if you don’t use it wisely and manage it properly. This is why before you apply for a credit card you should learn the five most rules for owning a credit card, and learn them by heart.
Rule 1 – You should aim to pay off your balance in full each month
When you receive your credit card statement in the mail, it will often only ask for a minimum payment, which is usually a small percentage of the total balance. You can just pay this if you want, but bear in mind that the remaining balance will be carried over until next month and interest will almost certainly be added to it. This can make owning a credit card far more expensive than it needs to be. If you are a wise and prudent credit card owner, you will aim to clear your balance in full each and every month so that you never have to pay interest.
Rule 2 – You should never, ever miss a payment
Missing a credit card payment, even if you are only late by a few days, not only incurs a penalty fee from your credit card provider. It can also damage your credit score, making it tougher to get credit applications approved in the future.
Rule 3 – You should only spend what you can afford to pay back
Sometimes, a credit card can help you to make a large purchase that you wouldn’t normally be able to afford all at once if you simply relied on what’s in your bank account right now. The purchase will still be affordable if you budget for paying back the credit card balance over a few months. However, if you spend and spend without a thought of whether your income will cover the bill, you could end up in real trouble.
Rule 4 – You should always read the small print for your credit card
Credit cards come with terms and conditions, outlining things like hidden fees, charges for spending abroad and penalties for getting a cash advance on your credit card. Read the small print all the way through, so you will know how to use your card without incurring any unnecessary fees or charges.
Rule 5 – You need to keep your credit card safe
One of the most crucial credit card rules to rememberis to keep your credit card in sight at all times. To prevent yourself becoming a victim of credit card fraud, you should never tell anyone your credit card details and you should always shred documents containing credit card information.