Break These Bad Credit Card Habits for a Financially Brighter Future

The number of young people using credit cards has increased about 11% since 2013, and these young people often do not know how to handle their credit card properly to avoid unnecessary debt. Where business owners have poor credit card habits, then that may negatively affect their ability to get a merchant account for their business. However, some brokers will help business owners who have a less than stellar financial history. Visit eMerchantBroker.com for more information.

Whether you own a business or just visit businesses, using credit cards wisely will help you have a financially healthy future. Follow these quick tips to use your credit cards wisely.

  1. Avoid mindless charging. Credit card purchases are still purchases, and you will have to pay for them eventually. Some people think that if they pay with plastic, then it is like they aren’t paying with “real money.” Keep in mind that just because the credit card company is willing to give you credit, does not mean that you can actually afford to use all of that credit.
  2. Try to pay more than the minimum amount due. Paying only the minimum amount due will cost you in the long run. The interest that is racked up by paying only the minimum will cost you far more than the original purchase. If money is tight, then pay what you can, but otherwise, pay off your card as fast as you can.
  3. Try to keep your number of credit cards to a minimum. It is a good idea to have a few credit cards for emergency purposes. The average person has four credit cards. Don’t go run off canceling credit cards however—canceling cards can hurt your FICO score. Having too many credit cards increases the chances that you will actually use all of them and makes being sure they are all paid on time pretty difficult.
  4. Use the credit card for the essentials. Keep in mind that a credit card is exactly like a loan. Do you really need to take out a loan to buy another pair of shoes? Wouldn’t it make more sense to use the credit on something essential, like when your car breaks down?
  5. Avoid using your credit card for cash advances. A cash-advance option on the credit card may seem like an appealing feature if you really need the cash. However, using this feature often costs you more than your regular interest rate and they frequently tack on a transaction fee.

As long as you are paying off the balance every month, store credit cards that offer rewards can be very beneficial. Just keep the standard rule for credit card use in mind every time you consider charging something to your credit card—if you don’t pay for it now, then you will pay much more for it later.