4 tips for making smart use of your credit card.
Did you know that it is possible to use your credit card intelligently? This means that it is possible to use it as a support for your financial planning, providing advantages instead of disadvantages.
In fact, credit cards are extremely convenient, and to avoid falling into debt, it is important to view them as a kind of short-term loan, with the obligation to pay off the loan within 40 days. Contrary to what many people think, credit cards are not an extension of your salary. On the contrary, you should only make purchases with your credit card when you are certain that you will be able to pay off the bill next month.
We have simplified this topic for you and put together some tips that will help you use your credit card wisely. See below!
1. Be careful with installments
Do you often pay for your purchases in installments until you lose track of them? Be careful with debt! Paying for many purchases in installments can be disadvantageous, making it harder to keep track of your actual monthly expenses.
Furthermore, it can take several months to pay off a single purchase, which in some cases you may not even remember having made. Whenever possible, opt for cash payments, especially if there is a discount. If you need to pay in installments, don't forget to consider the cost of the installments in the following months.
An additional tip: some cards, such as Nubank, offer discounts for paying installments in advance. In this case, it may be advantageous to pay in installments as many times as possible without fees and then pay in advance through the app to get an extra discount.
2. Avoid the minimum payment
It can be tempting when you receive your bill and realize that you can only make the minimum payment to keep using your card. However, avoid this trap! Opting for the minimum payment will put you into the card's revolving credit, which has considerably higher interest rates.
The danger is that the debt snowballs because new purchases are made every month that are not paid off on time. Before you know it, you will already have a very high debt.
Therefore, no minimum payments! Make sure you plan your finances to ensure that you pay the bill in full. In extreme situations, consider not paying the bill in question and seek to renegotiate with your manager. It is more advisable than keeping the card available to make new purchases.
3. Choose a card with no annual fee
Is there anything more advantageous than using a credit card with no annual fees? There are currently several alternatives available that offer the benefit of not charging anything for their use. Some interesting cards are:
- The Santander Free Card is an international card that offers free annual fees when R$100 is spent per month.
- Banco Inter card, which offers an international Multiple Mastercard with no annual fee;
- The Card Nubank,, one of the most popular, even offers discounts on the invoice when installments are paid in advance.
4. Avoid having more than two cards
Do you agree that the more credit available, the greater the chances of debt? Some people have several credit cards, the total limit of which significantly exceeds their monthly income. This represents a considerable risk.
Don't forget to plan your finances to ensure that you pay your bill in full. So, here's a tip for those who have trouble getting organized: keep just one card. This makes it easier to control your expenses, due dates, installments, and general use of your credit card.
As you can see, it is entirely possible to use your credit card wisely. To do this, opt for cash purchases, avoid minimum installments, look for cards with free annual fees and do not accumulate multiple cards.
How about clarifying if It is worth taking out a loan to renegotiate a debt?
