by Schools Plus
A credit card from a credit union can be a great asset to have for when you need it. The trouble is, too many folks are not using them wisely. Having a credit card is giving you the chance to build a credit history of good standing which will help you later in buying cars, homes and other large purchases. Follow these 5 tips and you can enjoy the benefit of plastic for cash, while building up a good credit report.
A Credit Card is Not a Funding Source
For the inexperienced, a credit card may seem like free cash, there to buy anything their heart desires. This attitude is going to get you nothing but financial trouble fast. The best rule of thumb to follow when pulling out the plastic to pay is to ask if you have the cash to back it up. If not, then whatever it is you wanted to buy should wait until you do.
Pay the Balance Each Month in Full
This is why you should never spend more than you can afford. It’s easy to say I’ll use next weeks paycheck to cover this weeks spending, but heaven only knows what’s going to come up next week. Avoid paying the interest costs by just paying the whole thing off every time you get your bill.
Use a Credit Card that Rewards You
After the positive points on your credit rating, this should be the next reason why you are using a credit card in the first place. Some of those offered through the credit union will give you frequent flyer miles or even discounts when you use them. This makes every purchase like it is on sale. Why? Think of it this way, say you buy a portable infrared sauna for $50 using your credit card. (These are really good to have BTW if you are interested in clearing out your body of harmful toxins. Read some review sites on portable infrared saunas and you are going to see why that $50 is a good investment.) Anyway, if you get frequent flyer miles that equal just $1 off the price of a plane ticket, than you just reduced the price of your portable infrared sauna by a buck. Pay the card balance in full like we suggest, and you are saving money on every purchase you make.
Have a Spare for Emergency Use Only
Your lowest interest card is likely issued by your credit union, and should be kept only for the event of an emergency. This is the new tires for your car card, or a major repair on your home’s heater. Even if you can’t afford that at the time, the lower interest on that card will help soften the blow to your bank account.
Credit cards are not the root of financial problems, the people who abuse them are. Build your credit with a card, and you will find that financial moves in the future will be much easier for you.