The excitement is palpable for new credit card holders because the prospect of not having to have cash every time you want to buy something is very alluring. This offers convenience for many people but it can sometimes spiral out of control.

Why people like them

Credit cards make people feel like they have some kind of financial stability for them to have earned a credit card. They also allow for purchases even when there is no cash at hand or in one’s account. A credit card is convenient to carry around as opposed to large wads of money.

Why people don’t like them

Credit cards may lead to increased bills at the end of the month, especially if they charged the card to its maximum limit. There is also the issue of deadlines that come with paying the bill even when they have other pressing matters to take care of. Lastly, there is an interest charged on the bill if it is past due. This amount increases if you take longer to pay the bill or pay it in portions since interest is compounded.

Pitfalls to avoid

As a credit card holder there are several pitfalls which you can avoid so as to enjoy the benefits that come with credit cards. They include:-

  • Spend only what you need and not what your credit card allows you to spend. This will significantly reduce your debt at the end of every month.
  • It can be very tempting to put off paying a credit card bill because the credit card company may not follow you everywhere you go. It is however important to pay up on time. If you can, avoid paying in small portions and ensure that your balance is always at 0%. Paying by the deadline will ensure that you pay nothing in interest thus reducing your bill. It also improves your rating with the credit bureau and may serve to increase your credit limit with time and therefore open more doors for premium loans and more financing options.
  • Not going through your statement. Learn how to interpret your credit card statement. There may be some figures that were erroneously included thus causing you to pay for items that you should not have to pay for.
  • Opening many credit card accounts so as to have a higher credit limit. This will increase your spending limits but will also increase your debt. Opening new accounts rapidly will look suspicious to the authorities, especially if you are a new account holder, and may affect your credit score.

Discipline in spending and proper management of credit cards will keep your credit rating high.