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Should You Be Using A Credit Card?

Compared to the brick-and-mortar times when cash was the only way you could buy a product or hire a service, financial transactions have come a long way. Now, more businesses accept credit card payments than ever before. For the average consumer, this means well! 

With credit rewards that can get you almost anything, the decision to go cashless seems enticing, but one can wonder – “should I be using a credit card?” 

That’s the important question we’re trying to answer in this article today. With the help of a credit card, you can collect points that can make your dreams of travelling come true – but there are potential drawbacks, too.  

Debt Accumulation 

When you see several financial advisors asking people not to get a credit card, this is one of the most prominent reasons. Even though a credit card can offer you the freedom to buy something now and pay for it later, several people splurge uncontrollably. 

When people can’t pay their bills completely, they start to accumulate debt. This also makes it hard to stick to a monthly budget since you’re paying with money you don’t have.  

Annual Fee 

Another prominent reason people are doubtful about getting a credit card is the annual fee that they have to pay. Even though some debit cards don’t have a fee, almost every credit card has one. Depending on the credit card you decide to get, the fee can range from $25 – $1,200. A general rule of thumb is that a higher annual fee usually results in increased perks. 

Then again, different cards have different features. With that said, if you can manage to stay disciplined with your transactions, there are several benefits you can avail by getting a credit card. To ensure you enjoy them to the fullest, you’re going to have to follow some important tips.  

Bill Payment Frequency 

Generally, people pay the bill for their credit once a month. For people who can manage to restrict themselves to a budget, this strategy can be feasible. But if you think you’ll exceed the limit, try paying the bill more than once. 

This will mean that money will leave your account sooner, and you’ll have a clearer picture easily. This will also keep a low balance in your account, which will decrease credit utilization. 

Why is this important? Credit utilization is one of the most vital factors that determine a person’s credit score!   

Track What You Spend 

Cash leaves your wallet and is hard to trace if you don’t have a receipt. On the other hand, however, credit cards leave a trail you can easily follow. This way, you can have a record of how much you’ve spent on what. Always make sure you’re on track!   

Final Notes 

Getting a credit card can be a decision that will make you consider several factors beforehand. If you’re still wondering, “should I be using a credit card?” refer to the tips above to make an informed decision. 

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