Basic guide to know how to use a credit card

According to data from the Bank of Mexico , as of June last year, more than 17 million valid cards were registered throughout the country. There are many, right?

Despite being so many, most people do not know how to use a credit card either due to mismanagement or they are afraid to use it. Let’s not forget that they are financial tools and in order for them to fulfill that function, it is better to know what to do so that at no time they get out of control.

Before knowing how to use a credit card, let’s know what it is:

I know, we should have seen this lesson a long time ago, but we must make it clear that:
a credit card is equivalent to an amount that the bank provides you, sometimes they are based on the level of income and good credit history. You can use it in established businesses that are affiliated with the payment media processors.

Now, there are many people fear credit cards because of the fact of knowing the experiences of other people, or because of the fear of having mismanagement of them, but let’s see how to use a credit card without getting into debt:

Make sure you have the one that works best for you

When the bank offers you credit cards, make sure that the use you are going to give it is really of your benefit and you are going to take advantage of the credit. In the market there are banks that offer you a variety of cards, an example may be travel cards that give you benefits on travel tickets and / or purchases made if you are a person who travels constantly. Have the one that best suits your needs.

Limit your expenses

The first thing we have to understand about how to use a credit card is that it is NOT extra money that we have to be able to spend on whatever, since we think that by having plastic we can buy anything at any time and that in the end To make the payment, the cost is greater than our income and we end up immersed in having to pay a greater amount than what the ones we acquired actually cost.

If we have a monthly income of $ 13,000.00 and the credit limit on our card of $ 10,000.00, it is not that we have to spend 23 thousand pesos, to be able to spend monthly.

Pay in a timely manner

It considers that the ideal is that the total consumption is paid on the date of payment so that no interest is generated.

Example We buy food on January 22 and later on February 10 we buy shoes for $ 560, what we have to pay before March 9 is $ 810.00, whether it is deposited in full or partial payments.

Since if you only pay the $ 510.00. The bank will charge an interest of $ 300.00 and the following month would have to pay the new expenses generated plus the 321 pesos that we do not pay and this can generate indebtedness.

Never choose to pay only the minimum

As we know, after making our purchases the bank provides us with a minimum to pay monthly, which we should not consider in this way, since it will take more time to settle and the real cost of purchases increases; This, because the minimum payments as its name says, a minimum part goes to the principal and the rest is to cover interest. At the end of the day it is more expensive and not a profit.

Avoid using your credit card as if it were a debit card

Most banks provide you with the option of being able to make cash withdrawals that you can use for an emergency or a cash payment, it contemplates that this amount must be covered on the payment date to avoid generating additional interest for the provision cash.

Try not to exceed your credit limit

This is a very important point to take into account as account holders of any credit card, we must take care not to consume the total credit available on our card, since this could be interpreted as a lack of liquidity.

If you already have unpayable and overdue debts, we recommend you ask for help, at Solve your Debt we can help you create a plan to achieve its settlement.